FINRA imposes $275k fine on RBC Capital Markets

RBC Capital Markets, LLC has agreed to pay a $275,000 fine to settle charges by the Financial Industry Regulatory Authority (FINRA) for failing to maintain a reasonably designed anti-money laundering program from February 2016 through September 2023. The firm's Wealth Management division failed to establish policies and procedures to detect and report suspicious transactions.

During this period, RBC implemented three transaction monitoring rules that were improperly configured, rendering them ineffective. One rule based alerts on margin balances instead of account balances, another set credit thresholds too high, and a third generated excessive false positives by capturing routine internal transfers. These flaws left the firm unable to identify red flags for suspicious money movements.

RBC also lacked procedures for its two oversight groups to coordinate or escalate concerns about ineffective rules, allowing the deficient monitoring to persist for years. As a result, the firm violated FINRA Rules 3310(a), 3310(f)(ii), and 2010.

In addition to the monetary penalty, RBC has accepted a censure.