SEC Fines Wells Fargo Advisors $7M Over Anti-Money Laundering Failures

 Commentary  May 20, 2022 at 07:44 AM  Share & Print

 
 

What You Need to Know

  • Wells Fargo failed to file at least 34 Suspicious Activity Reports in a timely manner.

  • This is the second Bank Secrecy Act action against Wells Fargo Advisors in the last five years.

  • Wells Fargo must pay a $7 million penalty

Wells Fargo agreed Friday to pay the Securities and Exchange Commission $7 million for failing to file at least 34 suspicious activity reports in a timely manner.

This is the second Bank Secrecy Act action against Wells Fargo Advisors in the last five years. In November 2017, the SEC issued a settled order against Wells Fargo Advisors for failing to timely file at least 50 SARs.

According to the SEC’s order, due to Wells Fargo Advisors’ “deficient implementation and failure to test a new version of its internal anti-money laundering transaction monitoring and alert system adopted in January 2019, the system failed to reconcile the different country codes used to monitor foreign wire transfers.”

As a result, Wells Fargo Advisors “did not timely file at least 25 SARs related to suspicious transactions in its customers’ brokerage accounts involving wire transfers to or from foreign countries that it determined to be at a high or moderate risk for money laundering, terrorist financing, or other illegal money movements,” the SEC states.

The order also found that, beginning in April 2017, Wells Fargo Advisors “failed to timely file at least nine additional SARs due to a failure to appropriately process wire transfer data into its AML transaction monitoring system in certain other situations.”

Gurbir Grewal, director of the SEC’s Division of Enforcement, said in a statement that “when SEC registrants like Wells Fargo Advisors fail to comply with their AML obligations, they put the investing public at risk because they deprive regulators of timely information about possible money laundering, terrorist financing, or other illegal money movements.”

In addition to the $7 million penalty, Wells Fargo Advisors, without admitting or denying the SEC’s findings, agreed to a censure and a cease and desist order.


European Compliance Association

European Compliance Association

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