Tuesday, January 6, 2009

E*Trade is Fined $1Million Due to Failings in their AML Procedures

Reuters recently reported that E*Trade Financial Corp was fined $1 million because of the company’s failure to have adequate anti-money laundering procedures detect suspicious trades.

According to the brokerage regulator, E*Trade failed to provide the necessary automated tools to detect suspicious trading activity during the periods of January 2003 through May 2007. The reasoning behind this is because the company relied too heavily on its own employees to monitor these problems, when there were more than 110,000 trades daily. Clearly, this was too much for E*Trade to handle without an automated AML system in place.

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