The U.S. Securities and Exchange Commission (SEC) recently detailed charges against Wells Fargo Advisors, alleging the company failed to timely file at least 34 Suspicious Activity Reports (SARs).
The SEC indicated the timeline was between April 2017 and October 2021 and noted the broker-dealer has agreed to pay $7 million to settle the charges.
The SEC’s order outlined that the company’s system failed to reconcile the different country codes used to monitor foreign wire transfers due to Wells Fargo Advisors’ deficient implementation and failure to test a new version of its internal anti-money laundering (AML) transaction monitoring and alert system adopted in January 2019.
“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,”
SEC Division of Enforcement Director Gurbir S. Grewal said. “Through this enforcement action, we are not only holding Wells Fargo Advisors accountable but also sending a loud and clear message to other registrants that AML obligations are sacrosanct.”
According to the SEC, Wells Fargo Advisors did not timely file at least 25 SARs connected to suspicious transactions in its customers’ brokerage accounts involving wire transfers to or from foreign countries the company determined to be at high or moderate risk for money laundering, terrorist financing or other illegal money movements.
Additionally, the order also found that beginning in April 2017, Wells Fargo Advisors did not 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.
Per the SEC, Wells Fargo Advisors, without admitting or denying the SEC’s findings, also agreed to a censure and a cease and desist order.