https://www.vitallaw.com/news/broker-dealers-broker-dealer-sanctioned-for-sar-reporting-failures/sld01eb14b0d3f39545309e7cc4dd833c73c5#.

Haywood USA was censured and will pay civil penalties due to its failure to file SARs despite many red flags.

A broker-dealer has settled an SEC administrative proceeding arising from its anti-money laundering and reporting failures. The Commission found that Haywood Securities (USA) Inc. failed to file required suspicious activity reports and did not adequately implement its anti-money laundering (AML) procedures. In addition to a cease-and-desist order, the firm was censured and ordered to pay civil penalties (Haywood Securities (USA) Inc., Exchange Act Release No. 106333 (Sept. 11, 2026)).

Respondent Haywood Securities (USA) Inc.is a registered broker-dealer incorporated in Canada. Haywood's registered representatives and compliance personnel are dually registered in Canada and with FINRA in the United States.

Red Flags. According to the Commission, Haywood had anti-money laundering policies and procedures in place during the period at issue, spanning May 2021 through January 2026. Haywood, however, did not comply with its own AML policies and failed to file Suspicious Activity Reports with FinCen. As a registered broker-dealer, Haywood was required to file SARs on certain suspicious transactions involving at least $5,000 that the firm knew or suspected were suspicious.

The Commission says that in spite of red flags of suspicious activity, Haywood failed to identify or adequately investigate whether filing a SAR was warranted. In addition, despite having AML policies requiring ongoing monitoring of high-risk accounts, Haywood failed to do so. The firm also failed to adequately train its registered representatives regarding the SAR rule; doing so was required by its AML policies and procedures.

Convicted criminal. The order details Haywood's failure in relation to account openings and subsequent account activity. In one instance, Haywood learned that a convicted criminal was a member of the potential customer (an LLC) and was later aware that the purpose of opening the account was to deposit and immediately liquidate shares. In another, a customer's account activity raised multiple red flags that were identified in the firm’s AML policies and procedures, such as lacking indicia of an operating business. In each instance described in the order, no SARs were filed.

Violations. The Commission found that Haywood willfully violated Exchange Act Section 17(a) and Rule 17a-8, which require compliance with the reporting, recordkeeping, and record retention requirements of the Bank Secrecy Act. Without admitting or denying the findings, Haywood agreed to cease and desist from its violations. The firm was also censured and will pay a $750,000 civil penalty.