SEC: Miami Firm Broke Anti-Money Laundering Protocols

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February 4, 2016

The Securities and Exchange Commission said it imposed a $1 million penalty on a Miami-based brokerage after an inspection found the firm violated anti-money laundering rules.

During SEC examinations of E.S. Financial Services, now named Brickell Global Markets, the firm twice failed to provide required books and records identifying foreign customers receiving investment advice and being solicited by the firm, the SEC said in a statement. An ensuing investigation, the SEC said, found the brokerage’s customer identification program failed to obtain and maintain documentation to verify the beneficial owners of foreign customers trading through a brokerage account opened by a Central American bank affiliated with the firm.

E.S. Financial allowed 13 foreign corporate entities, and the 23 foreigners who were the entities’ beneficial owners, to execute $23 million in securities transactions through the Central American bank’s brokerage account, the SEC found. E.S. Financial worked with these foreign citizens as if they were regular customers, but didn’t collect, verify or document their identities, as required under anti-money laundering regulations, the SEC said.