The Financial Industry Regulatory Authority Inc. has fined BNP Paribas Securities Corp. and BNP Paribas Prime Brokerage Inc. $15 million for failures in anti-money laundering (AML) programs and for supervisory failures that involved penny stock deposits, resales and wire transfers that spanned four years.
Finra found that from February 2013 to March 2017, despite its penny stock activity, BNP did not develop and implement a written AML program that could reasonably be expected to detect and cause the reporting of potentially suspicious transactions.
Until 2016, BNP’s AML program did not include any surveillance targeting potential suspicious transactions involving penny stocks, even though BNP accepted the deposit of nearly 31 billion shares of penny stocks, worth hundreds of millions of dollars, from its clients, including from so-called “toxic debt financiers,” Finra said in a release.
During the same period, Finra said that BNP processed more than 70,000 wire transfers with a total value of over $230 billion, including more than $2.5 billion sent in foreign currencies.
BNP’s AML program did not include any review of wire transfers conducted in foreign currencies, and did not review wires conducted in U.S. dollars to determine whether they involved high-risk entities or jurisdictions.
Although BNP identified many deficiencies as early as January 2014, it did not fully revise its AML program until March 2017, Finra said.