RBC Capital Markets AML fine totaled $275,000 after FINRA said the firm failed to keep an adequate anti-money laundering program in place for more than seven years.
FINRA said RBC Capital Markets, LLC did not properly use policies and procedures to detect and report suspicious transactions in its Wealth Management division. The regulator said the failures ran from February 2016 to September 2023. As a result, FINRA cited breaches of Rules 3310(a), 3310(f)(ii) and 2010.
According to a Letter of Acceptance, Waiver, and Consent, the firm added three transaction monitoring rules in February 2016. However, FINRA said RBC set up those rules so poorly that they mostly did not work as planned. One rule aimed to flag accounts that moved funds without securities trading, but it used margin balances instead of account balances.
RBC Capital Markets AML Fine Details
That setup meant the rule rarely triggered. Meanwhile, another rule used credit thresholds that were too high to catch matching debit and credit patterns. A third rule created too many false positives from routine internal transfers.
FINRA also said RBC split oversight of the monitoring rules between two internal groups. However, the firm did not create a process for coordination or escalation between them. As a result, the flawed rules stayed in place for years without a fix.
RBC neither admitted nor denied FINRA’s findings, but it agreed to the sanctions. The firm changed its procedures in September 2023. It now requires periodic reviews of automated monitoring rules.
Review Began in Routine Examination
FINRA said the case came from a routine cycle examination, not from a specific enforcement referral. Additionally, the regulator censured the firm along with the fine.
The source article said RBC Capital Markets was founded in 1993 and is based in New York. It also said the firm has about 6,500 registered representatives across 400 branch offices.
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Source: LeapRate
