Compliance Officer Also Fined and Suspended
As one of the oldest and largest private banks in the United States, Brown Brothers Harriman should have known better. Formed as the result of a merger in 1931 between investment firms Brown Brothers & Co. and Harriman Brothers & Co., this assemblage united over a century of combined financial knowledge and experience. This resulted in creating an institution that has been around longer than many of today’s laws that govern it. With clients in the areas of investment banking, wealth management, commercial banking, investor services and more, it is critical that a company such as BBH maintain a fiduciary responsibly to hold itself to the highest standards of the financial industry.
Yet earlier this month, a FINRA investigation resulted in the assessment of an $8 million fine as a consequence of the poor anti-money laundering (AML) practices maintained by BBH, as well as other related violations. This is not the first time that BBH has been called on the carpet over such issues. In 2007, FINRA and the New York State Banking Department castigated BBH by imparting a formal order for the company to cultivate better internal operations, including the need to meet all AML regulatory requirements. Prior to the $8 million fine handed down to BBH, the highest AML-related fine ever levied was against Banc of America Investment Services in 2007, also for AML compliance offenses. Just as in that case, the BBH AML compliance failure pertains to penny stocks. In addition to this $8 million fine, Harold Crawford, the company’s former Global AML Compliance Officer, was also fined $25,000 and suspended from BBH for a month.