FINRA Expels AIS Financial, Inc. for Anti-Money Laundering Violations

The Financial Industry Regulatory Authority (FINRA) has announced that it has expelled AIS Financial, Incorporated, located in Westlake Village, CA, for failing to implement and enforce an anti-money laundering (AML) program. According to the release, AIS had disregarded its AML responsibilities by ignoring red flags and blatant suspicious activities for an extended time for financial gain.

The FINRA investigative hearing panel found that from November 2005 to December 2007, AIS failed to investigate and report suspicious penny stock activity in three instances. Apparently AIS turned a blind eye to suspicious activity involving customers liquidating billions of shares of penny stocks in numerous accounts resulting in huge commissions for the firm. Furthermore, the activity was concealed from the regulatory authorities. One instance involved suspicious activity in accounts controlled by a Costa Rica money management firm that had been the subject of other regulatory action. AIS allowed the transactions involving billions of shares of penny stock generating over $3 million in sales proceeds and commissions of $53,000 for the firm. In another case, the hearing panel found that AIS permitted approximately 20 customers to deposit and liquidate 65 million shares of low priced and thinly traded Asia Global Holdings Corporation stock (AAGH). The liquidations generated sales proceeds of $5.1 million and commissions of $243,304 for the firm.

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