Recently, the U.S. Securities and Exchange Commission (SEC) charged Wall Street-based brokerage firm, Albert Fried & Co. with failing to sufficiently evaluate or monitor customers’ trading for suspicious activity. Albert Fried allegedly failed to file Suspicious Activity Reports (SARs) with regulators over five years, despite read flags tied to its customers’ high-volume liquidations of low-priced securities. On a given day, the trading in one security exceeded 80% of the overall market volume. At other times, customers stocks were traded in companies that were delinquent in their regulatory filings or involved in questionable penny stock promotional campaigns. Andrew Ceresney, director of the SEC’s Division of Enforcement said: “Albert Fried & Co. ignored numerous instances when customer trading activity should have triggered the firm to file SARs. Brokerage firms must take their anti-money laundering responsibilities seriously so they can serve as a line of defense against misconduct and market risks.” Albert Fried agreed to pay a $300,000 penalty to settle the charges.
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