- Chief Compliance Officer and VP of Legal Affairs, Arrow Electronics
By 
Kyle Brasseur2023-10-02T19:42:00
New York-based broker-dealer Maxim Group agreed to pay an $800,000 fine in settling with the Securities and Exchange Commission (SEC) regarding the firm’s alleged failures to file required suspicious activity reports (SARs) and properly execute certain short sales.
The SEC announced its findings in an administrative proceeding Friday, the same day the Financial Industry Regulatory Authority (FINRA) posted a decision notice of its own against Maxim. FINRA fined the firm $500,000 and ordered it to retain an independent consultant regarding supervision failures and separate—but apparently related—suspicious activity reporting lapses.
From January 2018 through January 2019, Maxim did not design or implement its anti-money laundering (AML) policies and procedures to reasonably address risks associated with its low-priced, over-the-counter microcap securities business, the SEC alleged in its order. The firm failed to identify and properly investigate red flags in accordance with its policies, resulting in it not filing SARs for “numerous transactions that it should have had reason to suspect involved possible fraudulent activity or had no business or apparent lawful purpose,” per the order.
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