The U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) said on Friday it had assessed an $80-million civil penalty against Canaccord Genuity LLC over anti-money-laundering failures tied to suspicious trading in over-the-counter securities. 

The action is the largest penalty ever imposed by FinCEN on a broker-dealer for Bank Secrecy Act violations.  Canaccord failed to build an effective compliance program, conduct required due diligence, and file suspicious activity reports in time, allowing it to miss numerous securities-fraud schemes and onboard high-risk customers, the bureau said. 

In the consent order, Canaccord admitted to willful violations of the law. FinCEN said the firm failed to file at least 160 suspicious activity reports tied to dozens of OTC securities, with underlying suspicious transactions estimated in the thousands. Until late 2021, just four employees, each with duties outside trade surveillance, were assigned to review more than 100 reports, some generating thousands or even millions of line items. 

The order also said two compliance staffers falsified records during a FINRA examination to make it appear surveillance reviews had been completed while another employee falsified nearly 400 documents. The fourth individual backdated certain policies and procedures as part of the cover-up. 

FinCEN also said Canaccord operated correspondent accounts for foreign financial institutions without the required risk-based due diligence. 

Under the resolution, FinCEN said it would suspend $5 million of the penalty pending compliance with the order and credit Canaccord’s separate payments of $20 million each to the SEC and FINRA, leaving the firm to pay $35 million directly to FinCEN. 

Read more at FinCEN