According to FINRA, Loewen, Ondaatje, McCutcheon USA, LLC (doing business as BLV Securities) was censured and fined $20,000 on January 25, 2022, for failing to establish and implement adequate anti-money laundering (AML) policies and procedures.

Following a change in majority ownership, the firm's business model shifted to higher-risk activities, but the firm failed to tailor its AML program accordingly. While using a quarterly checklist process as its primary AML monitoring method, the firm failed to detect or investigate red flags of suspicious activity in multiple customer accounts.

The firm also failed to conduct an independent AML test in 2019. The previous year's test only assessed the AML program when the firm's business model still focused on private placements sold to domestic customers. The firm did not conduct another test until the following year, and only after prompting by FINRA. That belated test failed to review customer account activity or evaluate the firm's AML training program, rendering it inadequate to determine whether the firm was properly detecting and investigating potentially suspicious activity.

Additionally, approximately 80 percent of new customer accounts sampled by FINRA were opened without the required signature of a firm principal evidencing supervisory review and approval.

AML programs are critical safeguards against financial crimes that can harm investors and the integrity of financial markets. When firms fail to maintain adequate AML controls, they create opportunities for criminals to exploit the financial system.

Investors should be aware that reputable firms maintain robust AML programs to protect against fraud and financial crimes. This case illustrates the importance of proper supervision and compliance infrastructure at brokerage firms.