Sanctuary Securities penalised for AML deficiencies

The Financial Industry Regulatory Authority (FINRA) has once again demonstrated its commitment to upholding financial integrity by imposing penalties on Sanctuary Securities for deficiencies in its Anti-Money Laundering (AML) programme. This enforcement action highlights the critical importance of robust compliance frameworks in safeguarding the financial system from illicit activities.?

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The case against sanctuary securities?

Sanctuary Securities was found to have violated key provisions of FINRA Rule 3310, which mandates firms to establish and implement AML policies and procedures designed to detect and report suspicious transactions. The deficiencies included:?

• Failure to conduct adequate independent testing of its AML programme.?

• Lack of ongoing training for personnel responsible for AML compliance.?

• Inadequate customer due diligence processes, including failure to develop comprehensive customer risk profiles.?

These lapses are not isolated incidents. They reflect broader challenges within the financial sector, where firms often struggle to allocate sufficient resources to compliance, maintain data integrity in surveillance systems, and adapt to evolving regulatory expectations.?

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Why this matters??

Anti-money laundering measures are not mere regulatory checkboxes; they are essential safeguards against financial crimes such as fraud, market manipulation, and even terrorism financing. When firms fail to meet these standards, they expose themselves—and the broader financial ecosystem—to significant risks.?

FINRA’s actions serve as a reminder that non-compliance carries hefty penalties, not just in monetary terms but also reputational damage. In recent years, regulators worldwide have intensified their scrutiny of AML programmes, with fines reaching record levels for inadequate systems and controls.?

Lessons for Financial Institutions?

• Independent Testing: Regular and unbiased testing of AML programmes is crucial for identifying weaknesses before they become regulatory issues.?

• Comprehensive Training: Employees at all levels must be well-versed in AML requirements and red flags for suspicious activities.?

• Customer Due Diligence: Developing detailed customer risk profiles and conducting ongoing monitoring are vital for detecting unusual patterns.?

• Technology Integration: Leveraging advanced compliance technologies can enhance monitoring capabilities and ensure adherence to complex regulatory frameworks.?

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Looking Ahead?

The Sanctuary Securities case underscores the need for financial institutions to adopt a proactive approach to compliance. As regulatory expectations evolve, firms must prioritise investment in both technology and human resources to build resilient AML frameworks.?

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Conclusion?

This enforcement action by FINRA is not just a penalty—it is a call to action for the entire financial industry. Compliance is not optional; it is a cornerstone of trust and integrity in financial markets.?

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Author (REN) Renjith Chief Executive - ReTRRAC Global