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Red Flags, Not Ignorance, to Blame in Raymond James Personal Liability Case

May 20, 2016
Read Time: 0 min

Personal Liabilty Red Flags_May 2016


By now, most of us are familiar with the MoneyGram case. In 2014, FinCEN issued a $1 million civil money penalty against Thomas E. Haider, the Chief Compliance Officer at MoneyGram, for alleged pitfalls in the company’s anti-money laundering program. When individuals, often Compliance Officers, are found personally accountable for these types of shortcomings, we know it as personal liability.

It’s nothing new; personal liability has been around in the banking industry for decades. However, cases of it seem to be popping up more and more recently, and money services businesses are not the only ones who are susceptible.

Just this week, the Financial Industry Regulatory Authority (FINRA) issued a $17 million fine to Raymond James, a financial services company. Furthermore, FINRA suspended Linda Busby, Raymond James’s former Compliance Officer, and issued her a $25,000 fine.

According to FINRA, the company’s anti-money laundering processes did not keep up with the growth the company had seen in recent years. Instead, the AML program was allegedly pieced together and had several “red flags.” Suspicious activity was largely undetected or under-investigated, 

In a press release from FINRA, Brad Bennett, FINRA’s Executive Vice President and Chief of Enforcement said, “…The monitoring for suspicious transactions is an essential part of protecting our financial system and firms must allocate adequate resources to their AML compliance efforts. This case demonstrates that when there are broad-based failures within specific areas of responsibility, we will seek individual liability where appropriate.”

In the case of Raymond James, it is not to say that ignorance is to blame. In fact, Linda Busby is highly qualified in the world of compliance. She is CAMS-certified, a Certified Public Accountant, and has participated in several well-known groups in the AML industry. Rather, this shows us that regulators are taking these cases seriously, making no exceptions.

For bankers, the threat of personal liability may be a concern. However, at Banker’s Toolbox, we’re here to help.  Learn how BAM+ can help you streamline your BSA/AML program, remain compliant and sleep better at night.

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