Wells Fargo Fined $3.5M for Not Reporting Suspicious Activity

By Phyllis Diamond

A Wells Fargo brokerage unit agreed Nov. 13 to be fined $3.5 million to settle SEC charges it didn’t file Bank Secrecy Act suspicious activity report—SARS—on at least 50 occasions in 2012 and 2013.

Most of the failures “related to continuing suspicious activity” in accounts at U.S. branch offices that focused on international customers, the Securities and Exchange Commission said ( In re Wells Fargo Advisors LLC , S.E.C., Admin. Proc. File No. 3-18279, 11/13/17 ).

Wells Fargo Advisors LLC settled the proceedings without admitting or denying wrongdoing, according to the commission. It also agreed to review its anti-money laundering procedures and to conduct additional training.

According to the SEC, starting in about March 2012, new management over the concern’s AML program “created confusion” by telling the firm’s SAR investigators that they were filing too many SARs, and that filing a SAR required proof of unlawful activity. “These statements created an environment in which the SAR investigators experienced difficulty in recommending and filing SARs, especially continuing activity SARs,” the agency said.

Ultimately, the brokerage’s total SAR filings dropped by approximately 60 percent during an 11-month period and the firm was remiss with respect to at least 50 SARs, the SEC said, “45 of which related to continuing activity.”

To contact the reporter on this story: Phyllis Diamond in Washington at pdiamond@bna.com

To contact the editor responsible for this story: Seth Stern at sstern@bna.com

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