Alerts

SEC Sanctions Brokerage Firms for Failing to Comply with Anti-Money Laundering Rule

August 12, 2008

On July 30, 2008, the Securities and Exchange Commission (“SEC”) issued a Cease-and-Desist Order (“Order”) imposing remedial sanctions and penalties against E*Trade Clearing LLC and E*Trade Securities LLC (collectively, “E*Trade”), both of which are registered broker-dealers. The SEC initiated cease-and-desist proceedings against E*Trade for allegedly failing to comply with Section 17(a) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rule 17a-8 issued thereunder, which require broker-dealers to comply with the reporting, record-keeping and record-retention requirements in regulations issued pursuant to the Bank Secrecy Act, including customer identification program (“CIP”) requirements. Each of the E*Trade entities consented to the Order without admitting or denying the SEC’s findings.