According to FINRA, Young America Capital, LLC has been censured and fined $50,000 for failing to develop and implement a written anti-money laundering (AML) program reasonably designed to achieve compliance with Bank Secrecy Act requirements.

Despite receiving a warning from the SEC in 2020, the firm's written supervisory procedures continued to erroneously state that it had no responsibility to monitor for or report suspicious activity because it does not hold retail brokerage accounts. This interpretation was incorrect—all broker-dealers have AML obligations regardless of their business model.

The firm's procedures failed to provide guidance on detecting or monitoring suspicious transactions, how to conduct or document reviews of identified red flags, and lacked red flags tailored to its investment banking and merger and acquisition advisory business. Even after receiving FINRA examination exceptions and recommendations from annual AML independent testing, the firm's procedures still do not contain red flags tailored to its business.

Additionally, the firm failed to provide reasonable AML training to its registered representatives. The training was not tailored to the firm's business model and instead focused on suspicious transactions in retail brokerage accounts—which the firm does not hold.

What Investors Can Learn: AML programs protect the financial system from being used for money laundering, terrorist financing, and other illicit purposes. Even firms that focus on investment banking rather than retail brokerage must maintain robust AML programs. This case shows that regulators expect firms to tailor their compliance programs to their actual business activities.