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by Mike Caswell

The U.S. Securities and Exchange Commission has fined Vancouver brokerage Haywood Securities Inc. for failing to report suspicious activity involving the firm's clients over a five-year period. The clients identified by the SEC include an entity associated with a convicted criminal that sold tens of millions of dollars worth of shares shortly after opening the account. Another client, who traded almost entirely in microcap securities, was an individual who had his bank accounts frozen as part of a fraud investigation, the SEC says.

The fine for Haywood is contained in an administrative order that the SEC released on Friday, Sept. 11. The order directs Haywood's U.S. subsidiary to pay $750,000 (U.S.) within 14 days. The penalty represents a negotiated settlement, in which Haywood has not admitted any wrongdoing.

The case stems from multiple violations going back to May, 2021, in which Haywood failed to file suspicious activity reports, or SARs. As with all brokerages conducting business in the U.S., Haywood is required to report any suspicious activity involving at least $5,000 (U.S.). "In particular, Haywood USA failed to file SARs in connection with accounts that presented indicia of potential criminal activity or were associated with persons with a criminal history" and with accounts in which there were suspicious trades and other red flags, the order reads.

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