It’s a bad day for the brokerage firm BNP Paribas. Both BNP Paribas Prime and BNP Paribas Securities were forced to concede $15 million in fines. This was a result of US regulators investigating the firm’s anti-money laundering compliance and finding it wanting. FINRA had made the statement on Thursday, saying that BNP Paribas had failed in both detection and coordinating supervision of suspect transactions. Specifically, within the broking firm’s AML program during the period of February 2013 to March 2017. To add fuel to the fire, BNP Paribas’s surveillance system failed to properly communicate with other systems. This led to critical data simply not sending to the system and thus made its detection abilities less than it should have been. This increase is detection could have helped the broking firm discover billions of USD that was transferred from countries that display a high money laundering risk. These transfers took the form of both foreign currency and wire transfer transactions. This was all made clear by a statement done by FINRA, the Financial Industry Regulatory Authority. It’s the most significant regulator for securities firms in the Us, and the watchdog has zeroed in on BNP Paribas. They claim that the brokerage failed or abstained from implementing specific procedures and controls that ensured increased security. Specifically, they cite something that would have enabled reviews of suspect accounts, including specific foreign financial institutions. Of these suspected accounts, there are a few so-called Toxic Debt Financiers. Finra wasn’t done, however. It stated that BNP Paribas hadn’t made sufficient efforts in successfully monitoring trades and customers’ deposits in penny stocks. Even though BNP Paribas had substantial activity in that segment, they failed to monitor it for potentially suspicious activities. The result is 31 billion penny stock shares deposited and subsequently sold for a total of hundreds of millions of USD. BNP Paribas wasn’t just failing to uphold the penny stocks, however. During the same time, the firm had processed over $230 billion through more than 700 00 wire transfers. Of that, 2.5 billion was sent via foreign currency. BNP’s Paribas’s biggest fault would be to have decided against taking action against detected defects in its automated surveillance system. From January 2014 to March 2017, the company did not fix its AML program. FINRA takes exception to this. The regulator stated that BNP couldn’t identify potential red flags due to this faulty system. As a result, they couldn’t review suspicious activity involving wire transfers or penny stocks, resulting in that these activities didn’t get filed into suspicious activity reports. For further insult to injury, BNP didn’t properly train its employees to check for compliance issues in the transactions of low-priced securities. As a result, the bank relied on only one investigator to review more than 70 000 wire transfers that have a total value of almost $233 billion. For this specific failure, FINRA claims that it happened for two years.

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