The Securities and Exchange Commission reached a settlement with a Canadian-based broker over failures in its anti-money laundering (AML) measures, Wealth Management reported.
Haywood USA, a wholly-owned subsidiary of the Canada-based Haywood Securities that operates in the U.S., was fined $750,000 after the SEC alleged that it failed to file Suspicious Activity Reports (SAR) with the U.S. Treasury’s Financial Crimes Enforcement Network involving potentially suspicious customer transactions.
The alleged deficiencies took place between May 2021 and January 2026. The SEC detailed compliance issues that included Haywood USA’s failure to adequately implement its own AML policies and procedures for identifying, reviewing, and investigating red flags of suspicious activity.
“Haywood USA identified information during account opening, customer due diligence, and subsequent activity related to certain accounts that presented red flags for potentially suspicious activity. Despite information raising red flags for suspicious activity, Haywood USA failed to identify and/or did not adequately investigate the red flags to determine that a SAR filing was warranted,” the order said.
Additionally, the order said the firm failed to follow its own policies to provide ongoing monitoring of high-risk accounts, and failed to adequately train its representatives on these policies.
Among the examples that were cited include the firm’s failure to file SARs in connection with accounts linked to a publicly known convicted criminal; an account associated with a foreign national whose bank accounts had been frozen amid a fraud investigation; and multiple customers engaged in suspicious deposit-and-liquidation schemes involving low-priced securities.
The SEC found that Haywood willfully violated Section 17(a) of the Securities Exchange Act and Rule 17a-8.
Haywood agreed to settle the proceedings without admitting the findings, except regarding jurisdiction and the subject matter of the proceedings.
Along with the $750,000 fine, the firm was censured and ordered to desist from future violations..
The order also noted that Haywood USA has taken remedial action including strengthening its compliance program, adding AML compliance staff and retaining an outside consultant to enhance testing of its policies and procedures.
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