Brokers

SEC Fines Wells Fargo Broker $7M Over Suspicious Activity Reporting

By Dean Seal

The broker-dealer arm of Wells Fargo & Co. will pay the U.S. Securities and Exchange Commission a $7 million fine to resolve allegations that it failed to file at least 34 suspicious activity reports in recent years.

Wells Fargo Advisers neither admits nor denies claims that it failed to test a new version of its internal anti-money laundering transaction monitoring system which, after being adopted in January 2019, was unable to reconcile different country codes used to monitor foreign wire transfers.

As a result, the broker-dealer failed to flag at least 25 suspicious transactions involving wire transfers to or from foreign countries that it considered to pose a moderate or high risk for illegal money movements, such as money laundering or terrorist financing, the SEC said.

The Wall Street regulator also alleges that Wells Fargo Advisers didn’t file at least nine other suspicious activity reports since April 2017 due to failures in processing wire transfer data into its anti-money laundering tracking system in certain situations, like during bank holidays that didn’t have a corresponding brokerage holiday.

“This matter refers to legacy issues that impacted a transaction monitoring system and the issues were resolved promptly upon discovery,” Wells Fargo Advisers said in a statement.

Write to Dean Seal at dean.seal@wsj.com

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