CICC US Securities, Inc. has agreed to pay a fine of $300,000 as a part of a settlement with the Financial Industry Regulatory Authority (FINRA).
Between at least February 2019 and February 2020, CICC US failed to develop and implement an anti-money laundering (AML) compliance program and establish, maintain and enforce a supervisory system including written supervisory procedures (WSPs) reasonably designed to detect and cause the reporting of potentially suspicious activity in violation of FINRA Rules 3310(a) and 2010.
CICC US’s AML compliance program was not reasonably designed in light of the firm’s customers and business model to achieve compliance with the requirements of the Bank Secrecy Act (BSA), and implementing regulations promulgated by the Department of the Treasury, including the obligation to report suspicious activity. This conduct violated FINRA Rules 3310(a), 3110 and 2010.
Between at least February 2019 and February 2020, CICC US marked all trades on trade confirmations and firm blotters as “unsolicited” by default without reviewing or considering the circumstances of each transaction, despite activity by CICC US and its affiliates that may have constituted solicitation.
As such, CICC US’s supervisory system and written supervisory procedures (WSPs) were not reasonably designed to achieve compliance with Rules 10b-10 and 17a-3 of the Securities Exchange Act of 1934 and FINRA Rules 4511 and 2232, which require firms to maintain accurate books and records.
This conduct violated FINRA Rules 3110 and 2010.
In addition, between at least February 2019 and February 2020 CICC US provided three non-registered individuals with the authority and discretion to commit the firm’s capital as authorized signatories for its bank accounts.
This conduct violated FINRA Rules 1210 and 2010.
In addition to the $300,000 fine, the firm has agreed to a censure.
