A Raleigh, N.C.-based broker dealer agreed to pay $50,000 to settle charges from federal regulators that it violated the Bank Secrecy Act (BSA) and failed to comply with an
Pinnacle Capital Markets LLC agreed to the payment of the civil penalties without admitting or denying the allegations. More than 99% of the firm's customers live outside the U.S. and its business mostly involves order processing with direct market access software for foreign institutions, according to the Securities and Exchange Commission.
While Pinnacle established a CIP that said it would identify and verify the identities of all its customers, it failed to follow the procedures of its CIP from October 2003 to November 2009, the SEC said when announcing the action Wednesday.
In a concurrent action, the Financial Crimes Enforcement Network (FinCEN) accused Pinnacle of failing to establish and implement an adequate AML program and a due diligence program for foreign correspondent accounts. The firm also failed to set up a system for monitoring suspicious transactions, according to FinCEN.
"Of particular relevance in this case was the firm's failure to conduct adequate due diligence under its customer identification program when dealing with non-U.S. persons that were subaccount holders with direct access to U.S. securities markets," FinCEN Director James Fries Jr. said in a press release.
Pinnacle will pay two $25,000 payments to the U.S. Treasury Department to settle the charges.