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TD Ameritrade Fined $500K For Not Reporting Investment Advisers’ Suspect Activities
The US Securities and Exchange Commission is ordering TD Ameritrade Inc. (AMTD) to pay a $500K fine for not submitting mandatory suspicious activity reports (SARs) even after the broker-dealer stopped doing business with 111 independent investment advisers. The regulator contends that between 2013 and September 2015, the firm ended its business relationships with these advisers, who were not TD Ameritrade employees, due to what it found to be “unacceptable business, credit, operational, reputational or regulatory risk” to itself or customers.
While the brokerage firm did submit a number of suspicious activity reports (SARs) regarding suspect transactions made by some of these advisers it had fired, it did not submit SARs reports on some of the other advisers with whom TD Ameritrade had also ended their business relationships.
The suspect activities at issue allegedly included suspicious trading—including moving losses from trade errors to clients—inappropriate money transfers, and making false and misleading statements to customers while serving as an investment adviser managing their TD Ameritrade accounts.