In the evolving landscape of financial regulation, broker-dealers face mounting pressure to fortify their anti-money laundering (AML) frameworks, particularly in trade surveillance. FINRA Regulatory Notice 21-03, issued on February 10, 2021, underscores the heightened risks associated with low-priced securities—often referred to as microcap or penny stocks—and the need for vigilant monitoring to detect potential fraud…
FINRA Notice 21-03 highlights a critical intersection between anti-money laundering (AML) compliance and market integrity, particularly for firms active in underwriting, distributing, and trading low-priced or OTC securities. These markets, often characterized by limited transparency and heightened volatility, present increased risk of fraud, manipulation, and regulatory exposure. To remain compliant, firms must integrate AML-driven surveillance…
In light of the Financial Industry Regulatory Authority’s (FINRA) ongoing targeted examination of practices surrounding public and private offerings of small-capitalization exchange-listed issuers with business operations in foreign jurisdictions—such as China—financial institutions must immediately prioritize a comprehensive self-assessment of their current public and private offering practices. This review, detailed in FINRA’s October 2025 guidance, focuses…
The Compliance Burden in a High-Risk Environment In today’s regulatory landscape, financial institutions are under increasing pressure to remain compliant with a maze of laws and evolving global threats. At the center of this compliance framework are three pillars: the Bank Secrecy Act (BSA), Anti-Money Laundering (AML) regulations, and the Office of Foreign Assets Control…
