Raymond James Financial to Pay Fine to FINRA Over Email Communications
The Financial Industry Regulatory Authority has fined Raymond James Financial Services (RJF) $2M for not maintaining supervisory systems and procedures that were “reasonably designed” enough to oversee emails. The firm settled the case but without denying or admitting to the charges. It also agreed to a risk-based retrospective review of past emails for potential violations.
FINRA examined Raymond James’ email system “during a nine-year review period.” According to the self-regulatory organization, the system had significant flaws that allowed email communications to not undergo “meaningful review.” As a result, “unreasonable risk” was created that could have allowed for “certain misconduct” to go undetected. Also, the firm did not assign enough resources or staff to the team tasked with evaluating emails that had been flagged by the system, even as the number of flagged correspondence grew in volume.
FINRA said that Raymond James “unreasonably excluded” certain personnel who worked on customer brokerage accounts from “email surveillance.” The SRO claims that the emails of 300 registered representatives who were employed in branches with their own email servers were not subject to the “lexicon” of phrases and words for detecting emails that might merit review for potentially suspect conduct.
FinMa Scolds JPMorgan Over Alleged Anti-Money Laundering Regulation Breaches in Handling Of 1MDB-Related Transactions
The Swiss Financial Market Supervisory Authority, also called FinMa, has announced its findings in a probe of the way a JPMorgan Chase’s (JPM) unit handled transactions that occurred between 1Malaysia Development Bhd, a Malaysian state investment fund mired in global fraud allegations, and one of the fund’s business partners. According to the regulator, the Switzerland-based unit did not do an adequate enough job of identifying money laundering risks connected to the fund.
For example, in one alleged instance, said the regulator, the firm did not properly screen the hundreds of millions of US dollars from 1MDB that went to one person’s personal account rather than toward business use. That person was closely connected to a 1MDB business partner. JPMorgan later moved a “tranche” of the funds to an account belonging to a company with ties to the same person bit without finding out why the money was moved.
1MDB is currently under investigation by regulators from different countries, including Switzerland and the US. Some billions of dollars are believed to have been stolen from the Malaysian sovereign wealth fund. Meantime, 1MDB claims that no funds have been misappropriated and that it hasn’t committed any wrongdoing.
Finma said that in the wake of JPMorgan’s cooperation during the investigation, it is not going to impose any restrictions or fines on the firm.
US Regulators Approve “Living Wills” of Bank of America, Morgan Stanley, Wells Fargo, and Other Big Banks
The Federal Deposit Insurance Corp. and the Federal Reserve have approved the “living wills” of the eight biggest banks in the US: Goldman Sachs (GS), Bank of America (BAC), Wells Fargo (WFC), Morgan Stanley (MS), Citigroup (C), Bank of New York Mellon (BNY), State Street (STT), and JP Morgan Chase. These “living wills” detail the disaster plans of these banks should they go bankrupt.
Despite approving all the plans, the two regulators noted that there was room for improvement even among the “living wills” In which no shortcomings were noted. Updated plans will have to be turned in by July 1, 2019. The “living wills” became requirements under the 2010 Dodd-Frank Act in an effort to avoid another financial meltdown like the one in 2008.
If you are an investor that suspects your investment losses may be due to securities fraud, the SSEK Partners Group would like to offer you a free, case consultation. Contact our securities lawyers today.
Switzerland says JP Morgan violated money-laundering rules, National Post, December 21, 2017
Fed, FDIC release regional banks’ living will plans, American Banker, January 8, 2017
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