According to FINRA, U.S. Bancorp Investments, Inc. was censured and fined $500,000 for failing to timely file 42 Suspicious Activity Reports (SARs) and for inadequate anti-money laundering policies.

The violation occurred because the firm incorrectly applied a $25,000 monetary threshold for SAR filings, which is the threshold applicable to banks. Broker-dealers, however, are subject to a lower $5,000 threshold. This error meant that suspicious activity falling between $5,000 and $25,000 went unreported.

The unreported suspicious activity included account intrusions, identity theft, and internet scams, all serious concerns that could indicate customer harm or criminal activity.

The firm discovered the error after reviewing a similar FINRA enforcement action against a different company. To its credit, the firm took prompt remedial action, including conducting a six-year lookback review, retroactively filing the 42 identified SARs, amending written procedures to clarify the correct threshold, providing additional training to relevant personnel, and self-reporting to FINRA.

Despite these remedial efforts, the fine reflects the seriousness of SAR reporting obligations. Suspicious Activity Reports are a critical tool in combating money laundering, fraud, and other financial crimes. When broker-dealers fail to file timely SARs, it hampers law enforcement's ability to detect and investigate criminal activity.

For investors, this case highlights the importance of anti-money laundering programs at broker-dealers. These programs exist not only to comply with regulations but also to protect customers from fraud and other criminal schemes. Firms with robust AML programs are better positioned to detect suspicious activity that might indicate your account has been compromised.