Vancouver’s Canaccord Genuity fined $544K over anti-money-laundering rule violations

The logo for Canaccord Genuity is shown in Toronto on Wednesday, March 8, 2023. (The Canadian Press / Staff)

A Vancouver-based wealth management company has been fined more than half a million dollars for violations of Canada’s anti-money-laundering and terrorism financing regulations.

Canaccord Genuity Corp. has paid an administrative monetary penalty of $544,500 to the Financial Transactions and Reports Analysis Centre of Canada, better known as FINTRAC, the agency announced Thursday.

The penalty stems from four violations of the federal Proceeds of Crime (Money Laundering) and Terrorist Financing Act and its associated regulations, which were discovered during a compliance examination in 2023, FINTRAC said in a news release.

The penalty was imposed on May 14 of this year.

According to FINTRAC, the company’s four violations were:

• Failure to submit suspicious transaction reports where there were reasonable grounds to suspect that transactions or attempted transactions were related to a money laundering or terrorist activity financing offence.
• Failure to develop and apply written compliance policies and procedures that are kept up to date; and, in the case of an entity, are approved by a senior officer.
• Failure to assess and document the risk of a money laundering or terrorist financing offence, taking into consideration prescribed factors.
• Failure to take the prescribed special measures for high risk.

“The administrative monetary penalty has been paid in full and proceedings have ended,” the FINTRAC release reads.

The agency’s summary of the penalties goes into more detail about the conduct that led to them, though it does not name any of the Canaccord clients involved.

The summary indicates that three suspicious transaction reports – out of 100 case files where such a report was warranted – were not submitted.

In one of the cases, Canaccord “failed to consider the multiple money laundering and terrorist activity financing indicators present,” including “the use of multiple foreign bank accounts for no apparent reason, common identifiers such as an address being used by multiple clients that appear to be unrelated, and the presence of information that is misleading and vague,” according to FINTRAC.

In another case, Canaccord “received a payment order from a government agency with respect to a high-risk client and was aware of relevant negative media,” and in the third, the company “discounted crucial money laundering and terrorist activity financing indicators in the course of its periodic reviews, such as relevant negative media articles.”

FINTRAC’s administrative monetary penalties are intended to encourage compliance, not to punish the entities on which they are imposed.

In its 2023-24 reporting year, FINTRAC issued 12 penalties, totalling more than $26 million.

Canaccord Genuity describes itself as the world’s “most active mid-market investment bank,” with more than $40 billion in assets under administration and offices in Vancouver, Calgary, Toronto and Montreal, as well as several cities in the U.S., Australia, China, the U.K. and Ireland.