The Financial Industry Regulatory Authority (FINRA) has imposed a $25,000 financial penalty on a former AML Compliance Officer (AMLCO) of Interactive Brokers, Arnold J. Feist. The fine was motivated by severe lapses in performing his duties.
The self-regulatory organization also suspended him for two months from holding principal capacity roles with any FINRA member firms. Additionally, Feist has to complete 10 hours of continuing education on AML responsibilities.
Feist served as AMLCO at Interactive brokers between July 2006 and August 2018. During that time, he was responsible for maintaining the brokerage’s anti-money laundering (AML) programs. According to FINRA’s statement, Feist failed to establish and implement and monitor a reasonably designed such program at Interactive Brokers during the period between January 2013 and August 2018.
The regulator also alleges that Feist failed to get to know and understand Interactive Broker’s AML program and did not even supervise the company’s AML analysts.
While he was AMLCO, Feist learned about, but failed to recognize the import of, facts that should have alerted him that Interactive Brokers’ AML program was not reasonably designed to detect and cause the reporting of suspicious activity or to comply with Bank Secrecy Act regulations.
As AMLCO, it was Feist’s responsibility to decide whether Interactive Brokers would file a Suspicious Activity Report (SAR). However, Feist incorrectly believed that the firm did not need to file a SAR concerning suspicious activity the firm first learned about from regulators or law enforcement agencies investigating that same conduct.
Feist has consented to FINRA’s sanctions of the fine and suspension.
Experienced writer and journalist, working in the global online trading sector, Steffy is the Editor of LeapRate. She has previous experience as a copywriter and has been with the company since January 2020. Steffy has a British and American Studies degree from St. Kliment Ochridski University in Sofia.