Securities Lawyers Blog
When FINRA brings a disciplinary action against a brokerage firm, the findings frequently describe supervisory failures, unsuitable investment recommendations, or sales practice violations that affected many customers at once. The FINRA actions described below involve EFG Capital International. The FINRA arbitration lawyers at Gana Weinstein LLP represent investors in FINRA customer disputes against brokerage firms, and a firm’s regulatory record is often important evidence in those claims. Our attorneys can determine whether your investment losses are connected to the conduct FINRA identified.
EFG Capital International is a broker-dealer that provides private banking clients with wealth management, discretionary mandates, wealth planning, credit solutions and structured investment products. Registered since 1996 and located on Brickell Avenue in Miami, the firm is part of the Swiss private banking group EFG International and focuses largely on international and Latin American clients.
EFG Capital International – By the Numbers:
- CRD #: 40118
- Regulatory Events: 6
- Broker Employees: 113
EFG Capital International – In the News:
FINRA v. EFG Capital International (Case #2021069508201) – Between May 2018 and August 2022, EFG violated FINRA Rules 3310(a) and 2010 by failing to establish and implement policies and procedures for its AML compliance program that could be reasonably expected to detect and cause the reporting of suspicious transactions. As a result, EFG is censured and fined $650,000.
FINRA v. EFG Capital International (Case #2015046020002) – From April 2010 through July 2015 (the “Relevant Period”), EFG failed to establish and implement an adequate supervisory system, including written supervisory procedures (“WSPs”), or anti-money laundering (“AML”) program related to two material areas of its international business model. EFG did not adequately assess, supervise or mitigate the business risks associated with: (1) its payment of transaction-based compensation to non-registered individuals or entities; and (2) potentially suspicious outgoing wire transfer activity occurring in accounts of dual customers of the Firm and its Swiss bank affiliate. As part of its international business model, EFG entered into transaction referral agreements under which a foreign individual or entity, called a “foreign introducer,” referred specific transactions to the Firm in exchange for a percentage of the Firm’s mark-up or commission on the referred transactions. However, EFG’s supervisory system was unreasonable because it failed to assess whether it had sufficient information about the foreign introducer, or its ability to legally satisfy its obligations under an agreement, to conclude that the Firm’s payment of transaction-based compensation to the foreign introducer was permissible under U.S. law. As a result, EFG violated NASD Rules 3010(a) and (b) (for conduct from May 1, 2014 through November 30, 2014) and FINRA Rules 3110(a) and (b) (for conduct from December 1, 2014 through March 24, 2015) and 2010. Additionally, the Firm’s AML system and procedures did not identify whether the Foreign Introducers with which it did business were high-risk entities or engaged in high-risk activities, and did not adequately review the foreign introducer’s referred transactions or wire transactions for red flags and patterns of suspicious activity. Separately, many of the Firm’s high net worth customers were dual customers of EFG and its Swiss bank affiliate, where all of these customers’ money movement activity occurred and the activity was subjected to automated monitoring for Swiss AML purposes. EFG typically had operational involvement in outgoing money movements entered into by these customers, and reviewed such transactions at the time they were made for potential AML red flags. However, the Firm’s overall AML program was insufficient to identify and investigate potentially suspicious patterns of outgoing wire transfer activity in the Swiss bank accounts of EFG’s dual customers that should have raised AML red flags requiring further investigation by EFG and potentially the filing of suspicious activity reports (“SARs”). As such, EFG violated FINRA Rules 3310(a) and 2010.
The FINRA actions described above involve EFG Capital International itself, and investors whose losses are connected to the conduct FINRA identified may have claims against the firm. Gana Weinstein LLP offers free consultations and we welcome all inquiries.