BD to Pay $1.2M to Settle Reporting Charges

OTC Link LLC, a New York-based broker-dealer, has agreed to pay $1.19 million to settle charges it failed to file numerous reports of suspicious financial transactions over a three-year period, the Securities and Exchange Commission said Monday.

To help detect potential securities law and money-laundering violations, broker-dealers like OTC Link are required to file suspicious activity reports, or SARs, describing suspicious transactions conducted through their firms, the commission noted.

OTC Link operates three alternative trading systems for over-the-counter securities —OTC Link ATS, OTC Link ECN and OTC Link NQB — the SEC said.

Other broker-dealers use the three OTC Link trading systems daily to execute or facilitate tens of thousands of transactions in securities, many of which are considered microcap or penny stock securities, the SEC said in a release.

From March 2020 through May 2023, however, OTC Link failed to adopt or implement reasonably designed anti-money laundering policies and procedures to monitor transactions conducted through its systems for possible red flags of suspicious activity, the regulatory body said, and — as a result — did not file a single SAR over the three-year period .