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E.S. Financial to Pay $1 Million Over Anti-Money Laundering Lapses

According to the SEC, E.S. Financial worked with non-U.S. citizens as if they were their own customers, yet did not have adequate customer identification programs to verify their identities. 

On February 4, 2016, the U.S. Securities and Exchange Commission announced that Brickell Global Markets (formerly E.S. Financial Services) agreed to pay $1 million to settle charges that it violated anti-money laundering regulations. According to the SEC, E.S. Financial allowed foreign entities to buy and sell securities without first checking identities.

All financial institutions are required by law to have functioning customer identification programs (CIPs). Verifying the identities of customers helps financial institutions prevent aiding money laundering schemes, and even terrorism.

Upon investigation, the SEC discovered that E.S. Financial’s CIP did not obtain or maintain documentation that would verify identities of foreign customers – specifically, customers who bought and sold through a Central American bank’s brokerage account.

E.S. Financial worked with non-U.S. citizens without verifying their identities, even though this type of verification is required by federal anti-money laundering regulations.

In addition to the $1 million fine, E.S. Financial also agreed to have an independent monitor review its policies for a period of two years. The SEC stressed that, while no fraud occurred in this instance, it is lapses like this that could facilitate misconduct.

The information contained in The Firm’s posts on its blog, fraud alerts, investigations or elsewhere on the site is based upon information obtained from other sources including, but not limited to, news outlets and federal, state, and regulatory agency filings. All suspects and subjects of postings herein are presumed innocent until proven guilty in a court of law or administrative action and any and all crimes are alleged until a court or regulatory agency finds otherwise .

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