BTG Pactual US Capital, LLC

BTG Pactual US Capital was fined $400,000 for failing to establish and implement policies and procedures for its anti-money laundering (AML) compliance program that could be reasonably expected to detect and cause the reporting of suspicious transactions.

The findings stated that firm’s procedures did not describe how it should monitor transactions involving customer money movements for AML red flags or how such monitoring should be documented. The firm utilized a third-party tool to conduct automated post-transaction monitoring, but the firm failed to develop and implement reasonable procedures to conduct timely reviews of the tool’s output and follow-up investigation of red flags.

The firm’s procedures did not reasonably address the firm’s process for reviewing, escalating, and documenting the alerts generated by the third-party tool. The firm failed to reasonably monitor and detect that the third-party automated monitoring tool was not working as intended to detect certain outgoing wire transfers to high-risk geographic locations.

The firm has since worked with its third-party vendor to ensure that its third-party monitoring tool is working as intended to generate alerts on outgoing wires and implemented a new system to review outgoing wire requests. The firm has also revised its written procedures with respect to customer callbacks, pre-approval of customers’ outgoing wire requests, and post-transaction monitoring of outgoing wires.