Last week ended with Merrill Lynch being probed for not detecting money laundering facilitated by its financial advisors. This is in addition to the FA being investigated by FINRA and, likely, will have licenses revoked or fined heavily. What caught my attention in a sentence in the a roundup paragraph in a Reuters article regarding this issue.
In December 2014, FINRA ordered two brokerage units of Wells Fargo & Co (WFC.N) to pay a joint $1.5 million fine for failing to verify 220,000 new accounts during a nine-year period.
This comes out to a fine of $6.82 per account not verified. This is less than minimum wage. Considering this fine covers a period of nine years, this is a relatively cheap. Many of those accounts might not even be open anymore, so, that would also mean Wells Fargo not having to go through the proper verification process for all of the 220,000.
Is your firm’s account verification process inadequate and willing to pay $6.82 nine years from now to fix it?
About the Author: Marcus Maltempo is a compliance professional with more than a decade of experience helping banks, law firms and clients manage investigations and regulatory responses.