Score Priority Corp., formerly known as Just2Trade, Inc, has agreed to pay a fine of $250,000 as a part of a settlement with the United States Financial Industry Regulatory Authority (FINRA).

From September 2016 through September 2020, Score Priority 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.

Between September 2016 and September 2020, Score Priority did not tailor its AML program to reasonably monitor for and report suspicious activity in light of the firm’s business model.

First, the firm lacked reasonable written AML procedures for the surveillance of potentially suspicious trading and money movements in customer accounts. Although the firm’s written procedures required the use and review of exception reports to assist with the identification of red flags for suspicious trading and suspicious money movements, they did not identify any exception reports that the firm would use and did not describe how supervisors should use them.

The firm’s written procedures stated that the firm would perform additional monitoring of accounts in which suspicious trading was identified, but did not describe steps for performing that monitoring or state how often the monitoring should occur. The written procedures also required that the firm “periodically” monitor transaction activity in foreign accounts, but did not describe the frequency or the manner in which such monitoring should occur.

Second, from September 2016 until April 2020, the firm relied almost exclusively on a manual review of the daily trade blotter to identify suspicious trading, even though it did not reflect patterns of trading across accounts or across multiple days. During this period, the firm did not regularly use any exception reports or automated tools to monitor customer transactions for suspicious activity, such as cancelled orders, patterns of trading across accounts or multiple days, coordinated trading, trading resulting in losses that might indicate a lack of rational economic motive, and other indicia of common forms of market manipulation. This manual review was also unreasonable given the volume and complexity of the trading by the firm’s customers.

Although the firm implemented an automated surveillance system from a third-party vendor in April 2020, it failed to timely review some alerts generated by the new system.

Additionally, until January 2020, the firm relied on a manual review of its daily money movement report to identify suspicious money movements, even though it did not reflect patterns or trends in money movements over multiple days, or accounts that had unexplained or sudden extensive wire activity, including in accounts that had little or no previous activity. In addition, it did not identify accounts that had high levels of money movements with very low levels of securities transactions. This manual review was also unreasonable given the volume and complexity of money movements by the firm’s customers.

Third, the firm had a practice of failing to reasonably respond to AML red flags.

As a result of Score Priority’s failure to implement a reasonably designed AML program, the firm failed to detect, investigate, and respond to potentially suspicious activities. For example, from July 2017 to August 2018, the firm failed to timely identify and respond to suspicious trading by multiple customers based in China.

Moreover, during 2019 and 2020, the firm failed to review multiple accounts in which there was an unexplained high level of account activity with no, or very low levels of, securities transactions.

Between September 2016 and September 2020, Score Priority failed to tailor its customer identification program (CIP) to the firm’s business, including its customer base, and failed to establish or implement policies and procedures regarding correspondent accounts for foreign financial institutions (FFIs).

The firm’s AML procedures failed to include reasonable risk-based procedures for verifying the identity of its customers. For example, the firm’s procedures did not describe the methods the firm would use to verify the information provided by its customers, including its foreign customers. The firm’s procedures also failed to describe the documents required to be collected from the firm’s foreign customers, or how the firm would address red flags during the account opening process.

The firm also failed to establish or implement policies and procedures related to the due diligence or review of correspondent accounts for FFIs.

Score Priority also consents to the imposition of a censure and an undertaking to retain an independent consultant.

Score Priority is an online introducing broker-dealer that offers its customers low-cost, self-directed trading of stocks and options through a web-based trading platform. The firm accepts accounts from customers located in foreign jurisdictions, including high risk jurisdictions. During all relevant periods, the firm had approximately 2,000 customers. The majority of the firm’s customers were retail customers.

The firm regularly received more than 1,000 orders from its customers per day.