Moors & Cabot FINRA fine reached $125,000 after FINRA said the brokerage failed to keep an adequate AML program and did not send Form CRS to thousands of retail investors.
FINRA also censured the firm, according to a Letter of Acceptance, Waiver, and Consent published by the regulator. The document said Moors & Cabot broke FINRA Rules 3310(a), 3310(f)(ii), and 2010 from January 2020 to May 2024. The source said the Boston-based firm has been a FINRA member since 1936. It also said the firm has 125 registered representatives across 22 branch offices.
Moors & Cabot FINRA Fine Details
FINRA said the firm’s AML surveillance system did not match the risks tied to frequent customer money movements. It lacked alerts for structuring and for transactions beyond outgoing wire transfers. Meanwhile, many AML alerts sat unreviewed for more than a month. FINRA also said staff closed most reviewed alerts within seconds and without meaningful inquiry.
Separately, FINRA found that Moors & Cabot failed to deliver Form CRS from June 2020 to March 2023. The source said the firm missed the required disclosure for 3,264 retail investors whose accounts were not cleared through its clearing firm. Form CRS outlines services, fees, and conflicts of interest.
Form CRS Failures Drew Additional Findings
FINRA said the firm also lacked a supervisory system to make sure it met that delivery duty. As a result, those failures were willful violations of Section 17(a)(1) of the Securities Exchange Act of 1934, Exchange Act Rule 17a-14, and FINRA Rules 3110 and 2010.
Moors & Cabot neither admitted nor denied FINRA’s findings, but it agreed to the sanctions. The firm has since revised its AML procedures, added surveillance alerts, and put in place a new system to track Form CRS delivery.
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Source: LeapRate
