Newbridge Hit with $125K Fine for AML Violations

Newbridge Securities was fined $125,000 by FINRA for inadequate anti-money laundering protocols and poor supervision of complex investment product sales.

September 10, 2024

Newbridge Securities Corporation, an investment firm based in Florida, has been fined $125,000 by the Financial Industry Regulatory Authority (FINRA) for inadequate anti-money laundering (AML) protocols and poor oversight of complex investment products. Along with the fine, Newbridge was ordered to pay more than $43,000 in restitution to impacted clients.

FINRA's investigation revealed that between June 2019 and July 2020, Newbridge failed to meet the necessary customer identification and due diligence standards, allowing several new accounts to be opened without confirming the customers' true identities. Additionally, from January 2015 to November 2019, Newbridge's representatives recommended high-risk variable rate structured products (VRSPs) to clients with lower risk tolerance, and concentrated certain customers’ portfolios heavily in these products, which was deemed inappropriate.

These failures violated FINRA regulations, including Rule 3310, which requires a "reasonably designed" AML program, and Rule 2111, which mandates firms to ensure investment recommendations are suitable for the investor's profile. Newbridge agreed to the fine, restitution, and censure without admitting or denying the findings.

This is not the first instance of sanctions against Newbridge. In September 2019, the firm was fined $225,000 for similar compliance issues related to complex securities, and in March 2023, they were fined $50,000 and ordered to pay $114,000 in restitution for lapses in supervising alternative mutual fund sales.

Newbridge Securities, which offers wealth management and investment banking services, operates with 141 registered representatives across 38 branches, including its headquarters in Boca Raton, Florida.