FINRA Fines Sanctuary Wealth $150,000 for AML Program Deficiencies
From the desk of Jim Eccleston at 麻花传媒
FINRA has fined and censured independent broker-dealer Sanctuary Wealth Management $150,000 for failing to establish an adequate anti-money laundering (AML) program to detect and report suspicious transactions. AdvisorHub reports that the settlement agreement (known as an “AWC”) found that between January 2022 and July 2024, Sanctuary lacked policies for identifying and reviewing red flags despite processing up to 40,000 fund and securities transfer requests annually.
Furthermore, the AWC reflects that Sanctuary also failed to properly investigate transactions flagged by its clearing firm as potentially suspicious. The firm cleared over 90 percent of flagged transfers without documenting a reasonable evaluation, relying solely on customer confirmation and a letter of authorization, which was determined to be insufficient. Among those transactions, FINRA noted that two seemingly unrelated foreign customers wired seven-figure sums to the same third-party entity based in a “bank-secrecy haven.” Additionally, the firm did not take reasonable steps to identify 17 inactive accounts that engaged in wire transfers without placing any trades during the two-year period.
AdvisorHub reports that FINRA found that Sanctuary violated Rule 3310, which requires firms to implement a “reasonably designed” AML program in compliance with the federal Bank Secrecy Act, as well as Rule 2010, which mandates firms to conduct business with honor. The firm also failed to conduct a test of its AML systems in 2022.
Sanctuary, which accepted the penalty without admitting or denying wrongdoing, has positioned itself as a destination for advisors serving international clients, particularly as larger firms have reduced their exposure to foreign customers due to compliance risks. The firm launched its international division, Sanctuary Global, in 2021 following Wells Fargo Advisors' decision to exit international wealth management, according to AdvisorHub.
麻花传媒 LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.
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