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Chief compliance officer, two broker-dealers charged with AML offenses

Jaclyn Jaeger | May 16, 2018

The Securities and Exchange Commission on May 16 announced that it settled charges against broker-dealers Chardan Capital Markets and Industrial and Commercial Bank of China Financial Services for failing to report suspicious sales of billions of penny stock shares. Chardan’s chief compliance officer was also charged.

“As gatekeepers to the securities markets, brokerage firms, including clearing firms, must take their anti-money laundering obligations seriously,” Marc Berger, director of the SEC’s New York Regional Office, said in a statement. “The failure to file SARs in the face of numerous red flags is unacceptable.”

According to the SEC order, Jerard Basmagy, the chief compliance officer and anti-money laundering (AML) officer for Chardan, “willfully aided and abetted and caused” Chardan’s AML violations. As a result, Basmagy must pay...

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