TradingBlock has agreed to pay a $210,000 fine as part of a settlement with the Financial Industry Regulatory Authority (FINRA) over failures in its anti-money laundering (AML) compliance program. The settlement includes a censure and an undertaking to certify that the firm has remediated its AML policies and procedures.
According to FINRA, from December 2018 to the present, TradingBlock failed to establish and implement an AML compliance program reasonably designed to detect and cause the reporting of suspicious transactions. The firm also did not include in its AML program appropriate risk-based procedures for conducting ongoing customer due diligence and monitoring.
FINRA determined that these shortcomings led to violations of FINRA Rules 3310(a), 3310(f), and 2010. Rule 3310(a) addresses the requirement for member firms to develop and implement written AML programs, while Rule 3310(f) relates to ongoing customer due diligence and monitoring. Rule 2010 requires members to observe high standards of commercial honor and just and equitable principles of trade.
Sanctions and Undertaking
For these violations, TradingBlock consented to a censure and the imposition of a $210,000 fine. As part of the settlement, the firm also agreed to an undertaking to certify that it has remediated its AML policies and procedures. The certification is intended to confirm that TradingBlock has addressed the deficiencies identified by FINRA in its AML program and ongoing monitoring processes.
Firm Profile
TradingBlock has been a FINRA member since 2004. The firm is headquartered in Chicago, Illinois, and operates five branch offices. It has approximately 20 registered representatives.
The firm's primary business line is providing online brokerage services for self-directed options trading to retail and professional customers. In this capacity, TradingBlock is required to maintain an AML program that is reasonably designed to detect and report suspicious activity, and to apply appropriate risk-based procedures for customer due diligence and ongoing monitoring.
The settlement underscores FINRA's focus on AML compliance and the obligations of member firms to implement and maintain effective programs to detect and report suspicious transactions, particularly in businesses offering online brokerage services for self-directed trading.
