Scarinci Hollenbeck Article Library

Results for articles

Failing to Understand Your SAR Reporting Obligations Can Result In Costly Penalties

Failing to Understand Your SAR Reporting Obligations Can Result In Costly Penalties

Author: Paul A. LiebermanDate: July 28, 2021

The Securities and Exchange Commission (SEC) recently brought another enforcement action this time against GWFS Equities Inc. (GWFS), a Colorado-based registered broker-dealer, for violating the federal securities laws governing the filing of Suspicious Activity Reports (SARs). The company will pay a $1.5 million penalty and agreed to certain AML remedial efforts to settle allegations of SAR violations relating to the failure to report several cyber-related events, specifically account takeover activity where cybercriminals attempt intrusions into a customer’s account in order to steal the customer’s funds. Of the SAR reports that GWFS did file, the SEC found that they lacked key information the broker-dealer was required to report about the suspicious activity and suspicious actors.  Interestingly, no members of the SAR committee or the firm’s BSA officer were held personally accountable.

Kurt L. Gottschall, Director of the SEC’s Denver Regional Office, in a press statement declared: 

scarinci hollenbeck diamond logo

Get the latest from our attorneys!

As the legal world continues to evolve, it is important to stay aware of its various and regular updates.
Sign up to our mailing list