Seller agency fined for KYC oversight failures

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In reference to the account transfers, the previous accredited individual submitted new account paperwork to GP Wealth Administration. The transferred accounts had almost an identical KYC data together with an funding horizon of “10 to twenty years”; a threat tolerance of “75% to 85% medium-high” and “15% to twenty% excessive”; and, for 79 of the accounts, funding targets of “80%” or “85%” progress / “15%” or “20%” hypothesis”.

Between 2013 and 2016, the individual additionally opened and have become the servicing dealing rep for 23 new leveraged accounts with GP Wealth. These accounts had been additionally invested in ROC funds, and almost all had the identical KYC data profile because the 88 beforehand transferred-in accounts.

Aside from these, GP Wealth additionally admitted that it “did not adequately detect and question uniformity within the Know Your Consumer data recorded by [the former approved person]” for 5 mortgage renewals in present accounts on the agency.

The KYC uniformity problem was uncovered by MFDA compliance workers throughout a compliance examination, after which the agency made adjustments in its department and desk evaluate program so as to, amongst different issues, determine patterns in shopper accounts with regard to threat tolerance, funding targets, and funding time horizon.

Noting that and different mitigating components, the listening to panel accredited a settlement settlement with a wonderful of $20,000 and prices of $5,000.

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