On February 27, 2025, the Financial Industry Regulatory Authority (FINRA) announced that Young America Capital LLC has agreed to pay a fine of $50,000 as part of a settlement for significant deficiencies in its anti-money laundering (AML) program. This enforcement action underscores the critical importance of maintaining robust AML compliance within financial institutions.

Background on Young America Capital

Young America Capital LLC is a firm specialising in investment banking and mergers and acquisitions advisory services. Located in Mamaroneck, New York, it has been a FINRA member since March 2010 and employs approximately 50 registered representatives across one registered branch office. The firm’s primary clientele includes businesses in the life sciences, technology, media, and telecommunications sectors.

AML Program Deficiencies

The deficiencies in Young America Capital’s AML program were identified as follows:

• Lack of Written AML Program: Since at least August 2020, Young America failed to develop and implement a written AML program that could reasonably detect and report suspicious transactions. This failure violated FINRA Rules 3310(a), 3310(f)(ii), and 2010, which require firms to have a program approved in writing by a senior manager and designed to comply with the Bank Secrecy Act (BSA) and its implementing regulations14.

• Inadequate AML Training: The firm also failed to provide reasonable AML training to its registered representatives, violating FINRA Rules 3310(e) and 2010. This oversight is crucial because ongoing training is essential for ensuring that personnel understand their roles in detecting and reporting suspicious activity14.

Regulatory Requirements for AML Compliance

FINRA Rule 3310 sets forth the minimum standards for AML compliance programs. Key components include:

• Written Approval: The program must be approved in writing by a senior manager.

• Suspicious Activity Detection: It must be designed to detect and report suspicious activity.

• Risk-Based Customer Identification: A risk-based customer identification program (CIP) is required to verify customer identities.

• Independent Testing: The program must undergo independent testing to ensure proper implementation.

• Ongoing Training: Regular training is necessary for personnel involved in AML efforts47.

Implications for Financial Institutions

This enforcement action serves as a reminder to all financial institutions of the critical role AML programs play in preventing money laundering and terrorist financing. Firms must ensure their AML programs are robust, regularly updated, and effectively implemented to avoid similar regulatory issues.

Conclusion

The fine imposed on Young America Capital underscores the importance of maintaining effective AML compliance. Financial institutions should review their AML policies and procedures to ensure they meet FINRA’s requirements and are adequately prepared to detect and report suspicious transactions.