The Financial Industry Regulatory Authority has fined Pictet Overseas Inc. USD 610,000 and Blue Ocean ATS USD 550,000 for anti-money laundering and supervisory failures tied to low-priced securities transactions, bringing the total penalties to more than USD 1.1 million. FINRA found both firms lacked AML compliance programs reasonably designed to detect and report suspicious activity in a market segment that carries heightened risks of manipulation and fraud. Blue Ocean was also ordered to certify that it has remediated weaknesses in its AML program. For Pictet, the findings covered low-priced securities activity from September 2021 to February 2025, including approximately USD 300 million in transactions involving more than 150 million shares between February 2022 and March 2023, with more than 70% of that activity routed through an omnibus account held by its foreign financial institution affiliate. FINRA said the firm failed to take timely corrective action after another regulator identified AML deficiencies in June 2021, relied for a period on manual reports that could not effectively identify suspicious patterns, failed to conduct adequate due diligence on foreign financial institution correspondent accounts, and maintained supervisory controls that were not reasonably designed to comply with Section 5 of the Securities Act of 1933 for low-priced securities; it also inaccurately reported transactions to the Trade Reporting and Compliance Engine and issued deficient trade confirmations. For Blue Ocean, FINRA said that despite rapid growth in its overnight trading business, which accounted for 95% of all overnight trading volume since inception and included substantial low-priced securities activity, the firm had since at least January 2023 relied mainly on manual reviews by a single employee and did not conduct surveillance for spoofing, layering or similar manipulative order-entry patterns, leaving red flags of suspicious trading undetected and uninvestigated. In settling the matters, both firms consented to FINRA's findings without admitting or denying the charges.
Financial Industry Regulatory Authority2026-05-20
Financial Industry Regulatory Authority fines Pictet Overseas and Blue Ocean ATS more than USD 1.1 million for AML and supervision failures in low-priced securities trading
The Financial Industry Regulatory Authority fined Pictet Overseas Inc. USD 610,000 and Blue Ocean ATS USD 550,000 for AML and supervisory failures in low-priced securities trading. FINRA found both firms lacked controls reasonably designed to detect and report suspicious activity, and ordered Blue Ocean to certify that it remediated its AML deficiencies. Pictet's case also included failures involving foreign financial institution account due diligence, trade reporting, trade confirmations and Securities Act supervision.