The Monetary Business Regulatory Authority censured and fined RBC Capital Markets $275,000 for failing to determine and implement affordable anti-money laundering insurance policies and procedures, based on a settlement letter.
From February 2016 by means of September 2023, RBC had improperly configured its automated surveillance system, and it didn’t determine sure suspicious exercise, together with fund motion inconsistent with the client’s anticipated exercise or different indicators of potential cash laundering, Finra stated.
RBC violated Finra guidelines requiring corporations develop and preserve anti-money laundering insurance policies in addition to its catch-all Rule 2010 mandating excessive requirements of conduct, based on the settlement. Finra stated it initiated its investigation following a routine examination of the agency.
RBC settled the allegations with out admitting or denying the findings. A spokesperson for the agency, which has round 2,400 brokers and likewise operates a clearing and custody service for third-party RIAs and broker-dealers, didn’t return a request for remark.
An RBC spokesperson stated the agency is happy to have resolved the difficulty. “The agency stays dedicated to robust compliance practices and repeatedly works to strengthen our monitoring capabilities in step with regulatory expectations,” the spokesperson wrote in a press release.
In 2023, RBC up to date its procedures to require periodic assessments of whether or not its automated monitoring guidelines have been successfully detecting doubtlessly suspicious exercise, based on the settlement. Finra didn’t determine the variety of missed transactions or say that any cash laundering had occurred.
In 2016, RBC launched three guidelines to flag potential cash laundering. One was supposed to determine accounts getting used to maneuver cash with out corresponding securities buying and selling. However RBC set it to generate alerts based mostly on every account’s margin stability, which generally fell under the required threshold, reasonably than its whole stability, based on Finra.
A second rule sought to determine accounts with practically matching credit score and debit transactions however did not generate helpful alerts as a result of the edge was too excessive. A 3rd rule designed to flag accounts with a excessive quantity of inside transfers produced quite a few false positives as a result of it captured routine transfers between accounts owned by the identical buyer or associated events, Finra stated.
The regulator additionally blamed RBC’s compliance governance because it positioned duty for reviewing the effectiveness of transaction monitoring with one group whereas one other group was tasked with decommissioning ineffective guidelines. The 2 teams didn’t coordinate or escalate considerations, Finra stated.
“Consequently, the three guidelines that did not generate helpful alerts remained in place for years and through this era, the agency did not determine, examine, and report suspicious transactions that these guidelines have been designed to detect,” Finra wrote
The regulator has concluded a number of AML circumstances in recent times. In January, it censured and fined Cetera Monetary Group $1.1 million over its supervisory system for AML compliance. In March 2025, Sanctuary Wealth Administration was additionally censured and fined $150,000 for its compliance failures.