In a settlement with the U.S. Securities and Exchange Commission (SEC), a subsidiary of Vancouver’s Haywood Securities Inc. is paying US$750,000 to resolve allegations that it breached anti-money laundering (AML) requirements by failing to file suspicious activity reports.
The SEC issued an order settling with Haywood Securities (USA) Inc., which alleged that between May 2021 through January of this year, the broker-dealer failed to file certain reports with the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) that were required under the firm’s own AML policies — specifically transactions worth more than US$5,000 that are accompanied by certain red flags.
“Haywood USA identified information during account opening, customer due diligence, and subsequent activity related to certain accounts that presented red flags for potentially suspicious activity. Despite information raising red flags for suspicious activity, Haywood USA failed to identify and/or did not adequately investigate the red flags to determine that a SAR filing was warranted,” the order said.
Additionally, the order said the firm failed to follow its own policies to provide ongoing monitoring of high-risk accounts, and failed to adequately train its reps on these policies.
Alongside the monetary sanction, the firm was censured and ordered to cease and desist from further violations.
The order also noted that Haywood USA has taken remedial action including beefing up its compliance program, adding AML compliance staff and retaining an outside consultant to enhance testing of its policies and procedures.
The firm settled the allegations without admitting the SEC’s findings.