SEC Announces Charges Against Wells Fargo Advisors Related to AML

On May 20, the US Securities and Exchange Commission (SEC) posted on Twitter that they are pressing “charges against Wells Fargo Advisors for failing to file at least 34 Suspicious Activity Reports in a timely manner between April ‘17 & Oct ‘21. Wells Fargo Advisors, the St. Louis-based broker-dealer, agreed to pay $7M to settle the charges.”

According to the SEC’s order, the system failed to reconcile the different country codes used to monitor foreign wire transfers due to the deficient implementation and failure to test a new version of its anti-money laundering (AML) transaction monitoring and alert system adopted in January 2019 by Wells Fargo Advisors.

As a result, Wells Fargo Advisors did not file at least 25 Suspicious Activity Reports (SARs) related to suspicious transactions in its customers’ brokerage accounts involving wire transfers to or from foreign countries that are determined to be at high or moderate risk for money laundering, terrorist financing, or other illegal money movements on time.

It was also found that Wells Fargo Advisors failed to file at least a further nine additional SARs due to failure to appropriately process wire transfer data into its AML transaction monitoring system in certain other situations.

Gurbir S. Grewal, the director of the SEC’s Division of Enforcement, stated that “when SEC registrants like Wells Fargo fail to comply with their AML obligations, they put the investing public at risk because they deprive regulators [of] timely information about possible money laundering, terrorist funding, and other illegal money movements.”

The SEC concluded that not only will it make sure that Well Fargo Advisors be held accountable, but it will also send a clear message to other registrants that AML obligations are “sacrosanct.”