FINRA fines Vision Financial for AML program deficiencies
Vision Financial Markets LLC and Vision Brokerage Services, LLC have agreed to pay a fine as a part of a settlement with the Financial Industry Regulatory Authority (FINRA).
From September 2016 through December 2020, Vision Financial and Vision Brokerage failed to develop and implement an anti-money laundering (AML) program reasonably designed to achieve and monitor the firm’s compliance with the Bank Secrecy Act and the implementing regulations thereunder. In particular, the firms did not establish and implement policies and procedures tailored to the firms’ business, which could be reasonably expected to detect and cause the reporting of suspicious activity arising from transactions and money movements in domestic and foreign-based retail accounts.
In addition, during that period, Vision Financial also accepted direct and omnibus accounts domiciled outside of the United States that had traders located primarily in China, Russia, Eastern Europe and other jurisdictions outside of the United States. Vision Brokerage similarly accepted direct accounts with foreign traders in these locations. Certain of these accounts had hundreds of traders who engaged in active trading strategies.
Despite the heightened risks presented by these accounts, Vision Financial and Vision Brokerage failed to establish and maintain a supervisory system, including written supervisory procedures (WSPs), reasonably designed to monitor for potentially manipulative trading on its platform, such as layering, spoofing, and wash trades.
Also, from August 2018 through December 2020, Vision Financial provided its customers with direct market access to an alternative trading system (ATS) and multiple exchanges but failed to establish, document, and maintain financial risk management controls and procedures reasonably designed to limit the financial and regulatory risks associated with this activity. Vision Financial’s failures resulted in potentially manipulative trading occurring and orders entering the markets without being subjected to reasonably designed risk management controls.
Based on this conduct, Vision Financial and Vision Brokerage violated FINRA Rules 3310(a), 3110, and 2010, and Vision Financial violated Section 15(c)(3) of the Securities Exchange Act of 1934, and Exchange Act Rule 15c3-5.
The respondents have agree to a censure, as well as a joint and several fine payable to FINRA in the amount of $95,625 (resolved with additional matters for a total fine of $850,000), as well as an undertaking to retain an independent consultant.