According to FINRA, SG Americas Securities, LLC was censured and fined $950,000 for failing to fingerprint and screen approximately 2,000 non-registered associated persons employed by affiliates of the firm, as required by Exchange Act Rule 17f-2.

The firm was required to fingerprint non-registered associated persons and review fingerprint results to screen for statutory disqualification. While these individuals were subject to background checks as part of the firm's screening process, the process did not include the collection of fingerprints and review of fingerprint results.

After FINRA initiated its investigation, the firm began remediation efforts. However, the firm was unable to fingerprint 990 individuals because they were no longer associated with the firm or its affiliates. The firm could not determine whether any of these formerly associated individuals were subject to statutory disqualification based on fingerprint results.

Ultimately, the firm completed its remediation efforts and did not identify any individuals subject to statutory disqualification. The firm also commenced fingerprinting individuals employed by affiliates in other locations.

FINRA found that the firm failed to establish, maintain, and enforce a supervisory system reasonably designed to achieve compliance with fingerprinting requirements. The firm lacked written procedures requiring fingerprinting of non-registered associated persons employed by affiliates.

The fingerprinting requirement exists to protect investors by ensuring that individuals with disqualifying events in their background are not permitted to work in positions where they could harm investors. This case demonstrates the importance of firms maintaining comprehensive compliance programs that extend to all associated persons, including those employed by affiliates.