E*TRADE Subsidiaries Fined $1 Million

Posted Jan 3, 2009

E TRADE Financial Corporation (NASDAQ:ETFC) was fined about $1 million for having inadequate procedures in handling trades that might be used for money laundering. Between January 2003 and May 2007, two of E*Trade’s units E*Trade Securities and E*Trade Clearing were the ones involved.

E*Trade analysts and employees manually checked for suspicious trades, but the company did not give them automated tools. This was the second fine against E*Trade within the last 6 months.  Last July, E*Trade agreed to pay $1 million to settle claims made by the U.S. Securities and Exchange Commission for violating the Patriot Act’s money-laundering clauses.  The identities of 65,000 customers were not properly identified.

?E*Trade upgraded its systems to provide an automated method to monitor for this particular activity, and those systems have been in place for over a year,? stated E*Trade spokeswoman Pamela Erickson.

[via Bloomberg]