A Miami-based brokerage, EFG Capital International, has agreed to pay $650,000 to settle Financial Industry Regulatory Authority (FINRA) allegations that the firm’s anti-money laundering (AML) systems failed to flag suspicious transactions and overlooked key compliance steps.
In a Thursday settlement letter, FINRA announced that EFG Capital was fined and censured for compliance deficiencies tied to its automated monitoring systems — issues uncovered during a recent regulatory exam. While the firm neither admitted nor denied the findings, EFG agreed to the sanctions and has since remediated its AML practices, according to the settlement notice.
FINRA Flags $305 Million in Unmonitored Wire Transfers
EFG Capital, a FINRA member since 1996 with about 120 representatives across six U.S. branches and a Swiss banking affiliate, came under scrutiny for system flaws that spanned May 2018 through August 2022.
Between May 2018 and November 2021, FINRA alleged, delays in data transmissions between EFG and its Swiss affiliate caused the firm’s AML tool to miss critical wire activity. As a result, the system’s daily monitoring failed to review roughly 900 wire transfers — totaling $305 million — including transfers to and from high-risk countries, according to the regulator.
The problem didn’t stop there. FINRA said a coding error in the automated AML system misclassified wire transfers from high-risk jurisdictions as domestic U.S. transfers by defaulting their country codes to “U.S.”. This glitch effectively cloaked $30 million in wire activity that should have triggered review and compliance alerts.
