Canaccord Genuity Corp. Fined $544,500 for Anti-Money Laundering Failures
| 2025-07-03
Canaccord Genuity Corp. Fined $544,500 for Anti-Money Laundering Failures
Canadian investment dealer Canaccord Genuity Corp. fined $544,500 for failing to comply with federal anti-money laundering regulations, according to FINTRAC.
The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) imposed the penalty following a compliance examination conducted in 2023. The penalty was paid in full on 14 May 2025, and proceedings are now closed.
Canaccord Genuity Corp., a major investment dealer regulated as a securities dealer under Canadian law, was found to have committed four separate violations of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. The most serious infraction involved the failure to submit suspicious transaction reports (STRs), despite the presence of multiple indicators suggesting potential links to money laundering or terrorist financing activities.
According to FINTRAC, the company failed to report three transactions from a sample of 100 cases. These cases involved clients with risk profiles that included the use of multiple foreign bank accounts without a clear purpose, shared addresses among unrelated entities, and vague or misleading information. In one instance, the firm closed a client’s account after determining it did not meet its intended purpose but failed to consider the broader context of suspicious indicators.
The agency also found that the company disregarded negative media coverage and red flags tied to payments involving a government agency, which FINTRAC said should have prompted more thorough reviews. It concluded that Canaccord Genuity Corp.’s internal systems were ineffective in identifying, analysing, and reporting suspicious transactions.
This first violation was deemed “Very Serious” under the regulations.
The second violation cited a lack of comprehensive and up-to-date compliance policies. FINTRAC stated that the firm’s documented procedures did not adequately reflect its legal obligations, especially regarding client identification, reporting timeframes, and adherence to special directives, including one targeting financial dealings with the Democratic People’s Republic of Korea.
This breach was classified as “Serious”, noting a failure to maintain proper governance over compliance documentation, which under Canadian regulations must be approved by a senior officer within the company.
In its third finding, FINTRAC determined that the company did not sufficiently assess or document the risks associated with money laundering or terrorist financing across its services and affiliates. The agency said the firm’s risk assessment lacked detail and failed to evaluate exposure based on geography, service channels, or the nature of its business operations.
The final violation involved inadequate application of enhanced due diligence measures for high-risk clients. Of 14 high-risk files reviewed, FINTRAC found outdated or missing information on beneficial ownership and client verification, in some cases not updated according to internal timelines.
Each of the final three violations was also classified as “Serious”, based on criteria laid out in Canada’s anti-money laundering legislation and related penalty regulations.
Context:
FINTRAC is Canada’s national financial intelligence unit responsible for detecting, preventing, and deterring money laundering and terrorist financing. It operates under the authority of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, which mandates reporting entities—including banks, investment dealers, real estate agents, and money services businesses—to implement risk-based compliance programmes and report suspicious transactions.
The administrative monetary penalty imposed on Canaccord Genuity Corp. highlights FINTRAC’s increasing scrutiny of securities dealers and investment firms, sectors considered vulnerable due to complex financial structures and global client bases. Previous enforcement actions have typically focused on banks or foreign exchange companies, but this case signals a broader enforcement scope targeting financial intermediaries.
Canaccord Genuity Corp. has not publicly commented on the penalty. According to FINTRAC, the firm cooperated with the investigation and paid the fine in full, bringing the matter to a close.
Canaccord Genuity Corp., a major investment dealer regulated as a securities dealer under Canadian law, was found to have committed four separate violations of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. The most serious infraction involved the failure to submit suspicious transaction reports (STRs), despite the presence of multiple indicators suggesting potential links to money laundering or terrorist financing activities.
According to FINTRAC, the company failed to report three transactions from a sample of 100 cases. These cases involved clients with risk profiles that included the use of multiple foreign bank accounts without a clear purpose, shared addresses among unrelated entities, and vague or misleading information. In one instance, the firm closed a client’s account after determining it did not meet its intended purpose but failed to consider the broader context of suspicious indicators.
The agency also found that the company disregarded negative media coverage and red flags tied to payments involving a government agency, which FINTRAC said should have prompted more thorough reviews. It concluded that Canaccord Genuity Corp.’s internal systems were ineffective in identifying, analysing, and reporting suspicious transactions.
This first violation was deemed “Very Serious” under the regulations.
The second violation cited a lack of comprehensive and up-to-date compliance policies. FINTRAC stated that the firm’s documented procedures did not adequately reflect its legal obligations, especially regarding client identification, reporting timeframes, and adherence to special directives, including one targeting financial dealings with the Democratic People’s Republic of Korea.
This breach was classified as “Serious”, noting a failure to maintain proper governance over compliance documentation, which under Canadian regulations must be approved by a senior officer within the company.
In its third finding, FINTRAC determined that the company did not sufficiently assess or document the risks associated with money laundering or terrorist financing across its services and affiliates. The agency said the firm’s risk assessment lacked detail and failed to evaluate exposure based on geography, service channels, or the nature of its business operations.
The final violation involved inadequate application of enhanced due diligence measures for high-risk clients. Of 14 high-risk files reviewed, FINTRAC found outdated or missing information on beneficial ownership and client verification, in some cases not updated according to internal timelines.
Each of the final three violations was also classified as “Serious”, based on criteria laid out in Canada’s anti-money laundering legislation and related penalty regulations.
Context:
FINTRAC is Canada’s national financial intelligence unit responsible for detecting, preventing, and deterring money laundering and terrorist financing. It operates under the authority of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, which mandates reporting entities—including banks, investment dealers, real estate agents, and money services businesses—to implement risk-based compliance programmes and report suspicious transactions.
The administrative monetary penalty imposed on Canaccord Genuity Corp. highlights FINTRAC’s increasing scrutiny of securities dealers and investment firms, sectors considered vulnerable due to complex financial structures and global client bases. Previous enforcement actions have typically focused on banks or foreign exchange companies, but this case signals a broader enforcement scope targeting financial intermediaries.
Canaccord Genuity Corp. has not publicly commented on the penalty. According to FINTRAC, the firm cooperated with the investigation and paid the fine in full, bringing the matter to a close.
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