← Broker database 2024-10-30
Suzanne Marie Capellini Barred by NAC for AML Failures and Providing False Information to FINRA
According to FINRA, Suzanne Marie Capellini was barred from association with any FINRA member in all capacities on October 30, 2024, following a National Adjudicatory Council (NAC) decision that she has appealed to the SEC.
The NAC barred Capellini for two separate sets of violations. First, she failed to establish and implement an anti-money laundering (AML) program reasonably designed to detect and report suspicious low-priced securities activity and failed to detect, investigate, and consider whether to report numerous red flags of suspicious activity. While trading in low-priced securities was a small portion of her firm's overall business, Capellini's failures were systemic and widespread, encompassing all low-priced securities activity at the firm.
Capellini's misconduct led to the potential for her own monetary gain because more than $360,000 in proceeds her husband generated from his deposits and sales of low-priced securities were used to pay the couple's household expenses. This created a significant conflict of interest—Capellini was responsible for monitoring low-priced securities activity for money laundering and manipulation, yet her household was benefiting financially from her husband's low-priced securities trading.
The NAC found that Capellini's misconduct demonstrated a lack of understanding of the AML rules and her duties as an AML compliance officer. This is particularly troubling because AML compliance officers hold critical positions with responsibility for detecting and preventing money laundering, terrorist financing, and market manipulation.
Second, the NAC barred Capellini for violations of FINRA Rules 8210 and 2010 based on findings that she provided false and misleading responses and an altered document in response to FINRA investigative requests with respect to low-priced securities trading activity in accounts held by her husband at her member firm. Capellini produced documents in response to FINRA's request for due diligence without disclosing that they were not in fact part of the firm's due diligence, but rather obtained after she received the requests. In addition, evidence established that Capellini altered one document before providing it to FINRA.
The NAC found that Capellini acted intentionally to mislead FINRA and continued to disavow responsibility for her actions even through the hearing. This finding of intentional misconduct and lack of acceptance of responsibility is extremely serious and demonstrates why the NAC imposed a bar for each set of violations.
For investors, this case illustrates the critical importance of effective AML compliance. Low-priced securities are often vehicles for pump-and-dump schemes, money laundering, and other fraud. When AML compliance officers fail to detect and investigate red flags, it allows these schemes to continue and harm investors.
The fact that Capellini had a financial interest in her husband's low-priced securities trading created an obvious conflict that should have been disclosed and managed. Instead, Capellini's household benefited from trading activity she was supposed to be monitoring for suspicious activity.
The findings that Capellini provided false information and altered documents to FINRA are particularly egregious. Providing false information to regulators is a fundamental breach of trust that strikes at the heart of the regulatory system. The bar is in effect pending Capellini's appeal to the SEC.