The Financial Industry Regulatory Authority fined three member-firms a total of $900,000 for what it describes as a failure to "establish and implement adequate anti-money laundering ("AML") programs and other supervisory systems to detect suspicious transactions." In addition, four firm executives including three from World Trade Financial Corporation ("WTF") based in San Diego, were individually sanctioned.
The precise penalties were distributed thusly:
- Atlas One Financial Group, LLC of Miami, Florida was fined $350,000 with former Chief Compliance Officer Napoleon Arturo Aponte fined $25,000 and suspended for three months in a principal capacity.
- Firstrade Securities, Inc. of Flushing, New York was fined $300,000.
- World Trade Financial Corporation ("WTF") of San Diego, California was fined $250,000 with President and Owner Rodney Michel fined $35,000 and suspended for four months. Additionally, Chief Compliance Officer Frank Crickell was fined $40,000 and suspended for nine months while trade desk supervisory and minority owner Jason Adams received a $5,000 fine and three-month principal suspension.
According to the findings regarding Atlas One, the firm failed to identify several red flags from 2007 through 2011, including suspicious account activity involving six atlas accounts controlled by one customer connected to a money laundering scheme. Those accounts were frozen by the US Department of Justice in 2007, though Atlas One allegedly failed to perform additional scrutiny of the accounts in the wake of the DOJ's actions.
Separately, FINA found that Firstrade wholly failed to implement an AML program meaning that suspicious transactions involving certain Chinese issuer stocks was not adequately addressed.
Finally, FINRA's investigation discovered that WTF and executives Brickell, Michel and Adams failed to create and enforce written supervisory procedures or to implement an adequate monitoring system related to unregistered penny stocks.
According to the findings, from 2009 to 2011, WTF bought and sold over 27.5 billion shares of penny stock on behalf of customer Justin Keener, generating $61 million in investor proceeds. In 2012, FINRA barred Keener for failure to provide the Authority with documents and information related to a FINRA investigation. FINRA alleged that although the Keener securities traded were not properly registered and not eligible for exemption, WTF and executive Brickell nonetheless executed the transactions. FINRA charged Michel with failure to supervise Brickell and WTF for failure to comply with the Bank Secrecy Act.
If you have invested with any of these firms, San Diego-based WTF executives Rodney Michel, Frank Crickell or Jason Adams, or with any broker or firm that has failed to implement adequate supervisory systems or monitoring systems, and this misconduct has proven harmful to your investments or interests, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.