EFG Capital International Corp of Miami Fined $800K and Censured by FINRA

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Soreide Law Group, based in South Florida, obtained the following information from FINRA's July 2018 Disciplinary Report from FINRA’s website on the following Miami firm:

EFG Capital International Corp. (CRD #40118, Miami, Florida)

EFG Capital International Corp was censured, fined $800,000 and required to adopt and implement supervisory systems and written procedures reasonably designed to achieve compliance with the requirements of FINRA. Without admitting or denying the findings, EFG Capital International Corp consented to the sanctions and to the entry of findings that it failed to establish and implement an adequate supervisory system, including WSPs, or anti-money laundering (AML) program related to two material areas of its international business model.

FINRA’s findings stated that EFG did not adequately assess, supervise or mitigate the business risks associated with its payment of transaction-based compensation to non-registered individuals or entities, and potentially suspicious outgoing wire transfer activity occurring in accounts of dual clients of the firm and its Swiss bank affiliate.

Also, FINRA’s findings stated that as part of its international business model EFG entered into transaction referral agreements under which a foreign individual or entity, called a “foreign introducer,” referred specific transactions to EFG Capital International Corp in exchange for a percentage of the firm’s mark-up or commission on the referred transactions. However, the firm’s supervisory system was unreasonable because it failed to assess whether it had sufficient information about the foreign introducer, or its ability to legally satisfy its obligations under an agreement, to conclude that the EFG Capital International Corp’s payment of transaction-based compensation to the foreign introducer was permissible under U.S. law.

FINRA states that EFG Capital International Corp allegedly failed to follow its own WSPs regarding the referral agreement and failed to identify several red flags related to the ownership of the foreign introducer and failed to follow-up on red flags regarding the unexpectedly large number and size of the referred transactions.

Additionally, FINRA’s findings stated that the firm’s AML system and procedures did not identify whether the foreign introducers with which it did business were high-risk entities or engaged in high-risk activities, and did not adequately review the foreign introducer’s referred transactions or wire transactions for red flags and patterns of suspicious activity.

FINRA states that many of EFG’s high net worth clients were dual clients of the firm and its Swiss bank affiliate, where all of these clients’ money movement activity occurred and the activity was subjected to automated monitoring for Swiss AML purposes.

EFG Capital International Corp had operational involvement in outgoing money movements entered into by these clients, and reviewed such transactions at the time they were made for potential AML red flags. However, the EFG’s overall AML program was insufficient to identify and investigate potentially suspicious patterns of outgoing wire transfer activity in the Swiss bank accounts of the firm’s dual clients that should have raised AML red flags requiring further investigation by it and potentially the filing of suspicious activity reports.

(FINRA Case #2015046020002)

If you've lost financial investments due to the actions or recommendations by the Miami firm, EFG Capital International Corp, contact Soreide Law Group, conveniently based in South Florida, and speak to an experienced securities lawyer at no cost regarding the possible recovery of your financial losses through a FINRA arbitration at: 888-760-6552.

Soreide Law Group represents clients nationwide before FINRA.  We operate on a contingency fee basis, no fee to you if no recovery.  Let our years of experience work for you.

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