The Financial Industry Regulatory Authority Inc. has barred Donna Jean Flemming, the former president and chief executive officer of Spencer Edwards Inc. for failing to implement an adequate anti-money laundering program and for falsifying documents.
The firm's membership in Finra was cancelled on Feb. 1. In addition to her role as head of the firm, Ms. Flemming served as chief compliance officer and its anti-money laundering compliance officer from 2012 until mid-2017. The firm was based in Centennial, Colo.
According to a Finra letter of acceptance, waiver and consent, Ms. Flemming "completely abdicated" her AML responsibilities from September 2013 to August 2015, when her firm derived more than 80% of its revenue from accepting customers' deposits of microcap securities and liquidating the shares. Finra said that Ms. Flemming did not monitor whether customers' deposits and liquidations of microcap securities posed red flags of potentially suspicious activity.
"In fact, she did not participate in the firm's process for reviewing and accepting stock deposits, instead delegating that authority to an unregistered person, the firm's outside lawyer, whom she did not monitor, audit or otherwise supervise. Moreover, even when the outside lawyer identified potentially suspicious activity during reviews of proposed stock deposits, "Ms. Flemming did not investigate, did not track customers' activity for patterns of suspicious activity, and did not determine whether the firm needed to file suspicious activity reports."
In addition, Ms. Flemming did not maintain adequate AML records, Finra said.
via Investment News