← Broker database 2026-04-14
Brentwood Capital Advisors Fined $45,000 for AML Compliance Program Deficiencies
According to FINRA, Brentwood Capital Advisors LLC was censured and fined $45,000 following an April 14, 2026 AWC.
The firm violated two aspects of AML compliance requirements. First, it failed to identify and verify the identities of beneficial owners of at least 15 legal entity customers receiving merger and acquisition and capital raising advisory services. FinCEN's Customer Due Diligence (CDD) Rule requires broker-dealers to collect and verify information about the natural persons who ultimately own or control legal entity customers. Knowing who actually controls and benefits from transactions is fundamental to preventing the use of shell companies or nominees to conceal the true sources or recipients of funds.
Second, the firm failed to conduct annual independent AML testing from 2018 through 2023—a span of six years. In 2019, the firm delegated testing to its own AML compliance officer, an arrangement that fails the independence requirement because the AMLCO is responsible for running the very program being evaluated. This rendered the 2019 test effectively non-independent. No testing of any kind occurred in the years that followed until 2024. The firm only began consistently identifying beneficial owners after FINRA launched an investigation in September 2024 and updated its procedures to require annual independent AML testing in January 2024.
AML compliance programs exist to ensure that broker-dealers do not unwittingly facilitate illegal financial activity. For investment banking advisory services involving mergers, acquisitions, and capital raising, knowing who controls the legal entities involved in transactions is essential to maintaining the integrity of those transactions and the broader financial system.
For businesses and sophisticated investors who engage advisory broker-dealers for M&A or capital markets transactions, this case underscores the importance of working with firms that take compliance seriously. Rigorous beneficial ownership verification and independent AML testing protect honest clients by ensuring that transactions are conducted within properly supervised, compliant channels. Firms that cut corners on these fundamental requirements create risk for themselves and for the clients they serve.