FINRA levies record fine of $8 million for substantial anti-money laundering compliance failures.

Penny stock transactions raise heightened risks because low-priced securities may be manipulated. FINRA found that Brown Brothers Harriman executed or delivered securities involving at least six billion shares of penny stocks, many on behalf of undisclosed customers of foreign banks in known bank secrecy havens. These transactions generated at least $850 million in proceeds for these customers. FINRA found insufficient monitoring and failure to sufficiently investigate. BBH neither admitted nor denied the changes but agreed to the record $8 million fine and public censure.

Case Law Alerts, 2nd Quarter, April 2014