First Clearing, LLC of St. Louis, MO, accepted a $400K fine to settle FINRA charges that its Anti-Money Laundering program was inadequate, in that the firm reviewed transactions covering only a limited amount of potentially suspicious activity.  Numerous reports were generated dealing with potentially suspicious securities transactions and money movements in customer accounts that were introduced by unaffiliated broker-dealers to the firm.

Those reports and alerts were provided to correspondent brokers to satisfy the introducing brokers’ AML obligations.  However, First Clearing, itself, allegedly didn't consistently review these same reports and alerts for suspicious activity reporting.  Instead, the firm reviewed only a limited number and type of transaction for its own suspicious activity report (SAR) reporting obligation.  The findings also included that the firm failed to establish and implement an adequate AML compliance program for detecting, reviewing and reporting suspicious activity.

FINRA would have expected the firm, at least, to have conducted sufficient risk-based monitoring of activity in accounts its unaffiliated
introducing broker-dealers introduced.  As such, First Clearing allegedly failed to comply with SAR reporting provisions of 31 U.S.C. 5318(g) and the implementing regulations as required by NASD Rule 3011(a).

This is FINRA Case #2008012791101.   [FINRA March Disciplinary Actions]