Fraud scheme uncovered involving multiple credit unions.
Industry regulators have censured U.S. Bancorp Investments and fined the firm $500,000 for allegedly failing to file dozens of suspicious activity reports as required.
St. Paul, Minnesota-based U.S. Bancorp Investments, which has over 2,350 registered representatives, consented to the censure and fine without admitting or denying findings from the Financial Industry Regulatory Authority, FINRA announced Friday.
When deciding whether to file suspicious activity reports, or SARs, USBI incorrectly used a $25,000 monetary threshold applicable to banks rather than the $5,000 threshold applicable to broker-dealers, FINRA reported. As a result, the firm didn't timely file 42 SARs from April 2020 and August 2023, FINRA found.
"USBI thus failed to establish and implement policies and procedures reasonably designed to detect and cause the reporting of suspicious transactions," violating FINRA rules and federal regulatory requirements, the authority said. "The suspicious activity that went unreported included account intrusions, identity theft and internet scams."
In determining the sanctions, FINRA reported that it considered that USBI identified the issue itself by reviewing a disciplinary action against another firm; initiated a review of the firm's systems, practices and procedures with respect to SAR filing; shared the review results with FINRA; promptly amended supervisory procedures and enhanced training for relevant employees; and retroactively filed the 42 SARs about two weeks after identifying the issue.
The settlement "resolves a self-identified issue which occurred during a transition period at the bank," a U.S. Bank spokesperson told ThinkAdvisor by email, noting the company has taken steps to help prevent a recurrence. "We take our reporting responsibilities seriously and are committed to following all applicable regulations. We're pleased to have resolved this matter."
Image: Chris Nicholls/ALM; Adobe Stock
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