The Financial Industry Regulatory Authority (FINRA) announced that it has fined Raymond James & Associates, Inc. (RJA) and Raymond James Financial Services, Inc. (RJFS) (collectively, Raymond James) for a combined $17 million for alleged widespread failures relating to the firm’s anti-money laundering (AML) programs. FINRA alleges that RJA, fined $8 million, and RJFS, fined $9 million, failed to establish or implement adequate AML policies and procedures. These alleged failures reportedly resulted in the firms’ failure to properly detect, investigate, and report suspicious activity over the course of several years. Linda L. Busby, RJA’s AML Compliance Officer from 2002 to February 2013, was also fined $25,000and suspended for three months.
According to FINRA, RJA and RJFS allegedly failed to improve their AML compliance systems to match the firms’ significant growth between 2006 and 2014. As a result, FINRA claims that Raymond James relied on a patchwork of written policies and procedures and systems across different departments to detect suspicious activity. FINRA claims that this resulted in certain “red flags” of potentially suspicious activity going undetected or properly investigated. FINRA asserts that Raymond James’ failures were especially concerning given that RJFS was sanctioned in 2012 for inadequate AML procedures,. As part of that earlier settlement, RJFS agreed to review its policies and procedures in order to certify that it had achieved compliance.
Among other things, FINRA reportedly discovered during its investigation that Raymond James failed to conduct required reviews for foreign financial institutions, that Busby failed to ensure RJA’s reviews were conducted, and that RJFS also failed to establish or maintain an adequate Customer Identification Program.
RJA, RJFS, and Busby neither admitted nor denied the charges, but consented to FINRA’s findings and accepted the settlements.