December 18, 2014 / 3:19 PM / in 3 years

Two Wells Fargo units to pay $1.5 million for anti-money laundering lapses: FINRA

(Reuters) - Two brokerage units of Wells Fargo & Co must pay a joint $1.5 million fine for failing to comply with anti-money laundering regulations by not verifying 220,000 new accounts during a nine-year period, the Financial Industry Regulatory Authority (FINRA) said on Thursday.

The logo on a Wells Fargo bank building is seen in downtown San Diego, California March 18, 2014. REUTERS/Mike Blake

The lapses, at Wells Fargo Advisors and Wells Fargo Advisors Financial Network, occurred between 2003 and 2012, according to FINRA, the Wall Street watchdog. Wells Fargo & Co neither admitted nor denied FINRA’s allegations, the regulator said.

FINRA rules require brokerages to have policies and procedures in place to comply with a federal law aimed at detecting and curbing money laundering.

A computer system at Wells Fargo, however, contained a design flaw that caused failures in identifying some accounts as new, FINRA said. The problem affected more than 3 percent of the 6.9 million customer accounts the two units had opened during the nine-year period, FINRA said in its settlement with Wells Fargo.

Wells Fargo uncovered the problem through routine compliance testing, according to the settlement document.

A Wells Fargo spokesman declined to comment.

Reporting by Suzanne Barlyn; Editing by Jeffrey Benkoe; and Peter Galloway

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