SEC Charges Three Broker-Dealers with Filing Deficient Suspicious Activity Reports

The Securities and Exchange Commission today announced that broker-dealers Webull Financial LLC, Lightspeed Financial Services Group LLC, and Paulson Investment Company, LLC have agreed to settle charges that they filed with law enforcement suspicious activity reports (SARs) that failed to include important, required information. The three broker-dealers agreed to pay $275,000 combined in civil penalties to settle the SEC’s charges. Federal law requires broker-dealers to file SARs to report transactions that the broker-dealer has reason to suspect involve, among other things, funds derived from illegal activity or activity that has no apparent lawful purpose. The SARs must contain “a clear, complete, and concise description of the activity, including what was unusual or irregular that caused suspicion.” According to the SEC orders, each of the three broker-dealers filed multiple deficient SARs over a four-year period beginning in 2018.