"Merrill Lynch Fined for Failing to File Suspicious Activity Reports"

Merrill Lynch, Pierce, Fenner & Smith Inc. is a broker-dealer that was fined by the Financial Industry Regulatory Authority (FINRA) for failing to file Suspicious Activity Reports (SARs); required documents to report suspected criminal activity. The firm incorrectly applied the $25,000 threshold applicable to national banks, rather than the $5,000 threshold applicable to broker-dealers, when deciding whether to file a SAR -- leading to 1,500 missing reports of suspicious activities over a span of 10 years. FINRA found that Merrill Lynch’s failure to properly file the SARs constituted a violation of their rules, and the firm consented to the entry of FINRA’s findings without admitting or denying any charges. To prevent similar occurrences in the future, FINRA released guidance, training resources, and an exam findings report to help firms better understand their obligations to report suspicious activities.