The Big Bank Playbook: Break the Law, Make Big Profits, Get Caught, Share the Profits

via WSJ:

Morgan Stanley has agreed to pay a $10 million fine to settle a Financial Industry Regulatory Authority probe into the firm’s compliance with rules designed to detect and prevent money laundering.

Finra said Wednesday Morgan Stanley had failed to adequately detect and coordinate the supervision of certain suspicious transactions within its anti-money-laundering program for more than five years.

Morgan Stanley’s automated anti-money-laundering surveillance system hadn’t received critical data from several systems that would have helped it detect tens of billions of dollars of wire and foreign currency transfers from high-risk money-laundering countries, Finra said.

Morgan Stanley had discovered some of the deficiencies in its automated surveillance system from the period of 2011 to 2016 after responding to Finra’s inquiries.

Finra alleged the company hadn’t implemented procedures and controls that would have ensured periodic reviews of accounts from certain foreign financial institutions.

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Moreover, Finra said the company didn’t sufficiently monitor customers’ deposits and trades in penny stocks for potentially suspicious activity despite heavy activity, resulting in 2.7 billion shares of penny stock deposited with subsequent sales of about $164 million.





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