FINRA fined Banorte-Ixe Securities International, Ltd. $475,000 for inadequately addressing anti-money laundering (AML) systems and procedures. FINRA also disciplined Banorte-Ixe for failing to register between 200 and 400 foreign finders who interacted with the firm's Mexican clients. Former AML and Chief Compliance Officer Brian Anthony Simmons received an additional 30-day suspension related to these failures.
The findings also charge Banorte-Ixe Securities with failing to monitor, detect and report $28 million of activity in a customer account reportedly tied to a Mexican drug cartel. The report described this $28 million movement as "suspicious" and "rapid."
According to FINRA Executive Vice President and Chief of Enforcement Brad Bennett, "When firms accept customers who are located in high-risk jurisdictions, their AML programs need to be carefully tailored and robust to address the risks inherent in this activity."
Banorte-Ixe services primarily Mexican clients investing in US and other global securities.
The investigation states that the firm failed by not properly investigating certain suspicious activity, including significant activity for which reporting is required by law.
The Bank Secrecy Act puts this requirement on certain suspicious transactions that involve at least $5,000 in funds or other assets. FINRA reasons that because Banorte-Ixe lacked adequate systems to identify and investigate suspicious activity, it therefore failed to adequately investigate and report, where applicable, activity in three customer accounts.
This includes the account with purported ties to a Mexican drug cartel, which experienced deposits and withdrawals of approximately $25 million over the course of just one month. This activity culminated in a $3 million transfer into and out of another corporate account via two wire transfers, another series that went unreported and uninvestigated.
FINRA also accused Banorte-Ixe Securities of failing to adopt AML procedures tailored to its specific business as opposed to simply accepting a generic approach not appropriate for the high-risk jurisdiction Banorte-Ixe served in Mexico.
Finally, FINRA concluded that Banorte-Ixe did not fully enforce its AML program as written and failed to register 200 to 400 foreign finders from January 2008 through May 2013.
In consenting to the entry of FINRA's findings, Banorte-Ixe and Simmons neither admitted nor denied the charges.
If you have invested with Banorte-Ixe Securities International or with any firm that deals with or in a high-risk jurisdiction, such as Mexico, and whose anti-money laundering programs or other procedures' deficiencies have resulted in actions or events that 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.