Wells Fargo Advisors Fined $1.5 Million for Anti-Money Laundering Failures

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FINRA fined Wells Fargo Advisors and Wells Fargo Advisors Financial Network a total of $1.5 million for anti-money laundering (AML) failures related to 220,000 new customer accounts created from 2003 to 2012. Regulators specifically charged the firms with failing to comply with required identity-verfication procedures.

FINRA Case #2012034123501

According to FINRA's investigation, Wells Fargo Advisors and its Financial Network possessed a deficient Customer Identification Program, which is a required element of AML compliance systems. Specifically, the Wells Fargo firms failed to subject 220,000 new customer accounts to a required identity-verification process.

The report states that the Customer ID Program was deficient because it possessed a design flaw that allowed customer identifiers issued to new accounts to be recycled if the first account had been closed. However, because the ID system saw that these new accounts' identifiers were previously assigned, it did not perceive the new accounts as actually being new; therefore, the new accounts did not receive the required identity verifications.

Investigators also found that 120,000 accounts that never experienced identity verification were already closed when the problem was discovered.

FINRA Chief of Enforcement Brad Bennett said, "While the firms eventually discovered the flaw in their own systems, it took far too long, resulting in hundreds of thousands of accounts to open and often close without the required identification process ever taking place."

If you invested with Wells Fargo Advisors from 2003 to 2012 or with any other firm whose anti-money laundering, customer identification verification or other compliance failures have proven harmful to your investments or interests, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for investigation and consultation.