Stash Capital LLC has agreed to pay a fine of $450,000 and accept a censure as part of a settlement with the Financial Industry Regulatory Authority (FINRA). The action stems from findings that, over several years, the firm did not maintain adequate controls related to customer identification, anti-money laundering (AML), and identity theft prevention.
According to FINRA, the violations occurred between January 2019 and June 2023. During this period, Stash Capital failed to establish and maintain a customer identification program that was reasonable in light of the size and nature of the firm's business and customer base. FINRA stated that this conduct violated FINRA Rules 3310(b) and 2010.
FINRA also found that Stash Capital did not develop and implement an AML compliance program reasonably designed to detect and cause the reporting of suspicious transactions. These failures were cited as violations of FINRA Rules 3310(a), 3310(f), and 2010.
In addition, during the same timeframe, the firm failed to develop and implement a written Identity Theft Prevention Program reasonably designed to detect, prevent, and mitigate identity theft. FINRA noted that this conduct violated Rule 201 of Regulation S-ID under the Securities Exchange Act of 1934, as well as FINRA Rule 2010.
Regulatory Context and Firm Background
The settlement includes both the $450,000 monetary fine and a censure, reflecting FINRA's findings regarding Stash Capital's compliance systems and controls. The action underscores regulatory expectations that member firms maintain robust customer identification, AML, and identity theft prevention programs that are appropriate for their business models and customer bases.
Stash Capital LLC has been a FINRA member since August 2017. The firm is headquartered in New York, New York, and offers self-directed investing through online brokerage accounts. The period covered by FINRA's findings spans more than four years of the firm's operations as a member.
The settlement details focus on policy and program design rather than specific customer incidents. By agreeing to the fine and censure, Stash Capital resolves the matter with FINRA, which has emphasized the importance of reasonable and effective compliance programs in areas such as customer identification, anti-money laundering, and identity theft prevention.
