FINRA has fined two member firms a combined total of more than $1.1 million for anti-money laundering and supervisory failures related to low-priced securities — in actions announced on 20 May 2026. Pictet Overseas Inc. was ordered to pay $610,000 and Blue Ocean ATS was ordered to pay $550,000 for substantially similar failures: AML compliance programmes that were not designed to detect suspicious activity in the exact type of business each firm was engaged in.
Pictet Overseas processed approximately $300 million in low-priced securities transactions involving more than 150 million shares between February 2022 and March 2023, including nearly $30 million in over-the-counter securities. More than 70 per cent of those transactions flowed through an omnibus account held by the firm's foreign financial institution affiliate — a structure that concentrates risk and requires proportionally more robust monitoring.
A Four-Year Warning That Went Unheeded
In June 2021, another regulator alerted Pictet to specific deficiencies in its AML programme. Despite that warning, and despite the firm processing hundreds of millions of dollars in low-priced securities trades in the years that followed, Pictet failed to take timely corrective action. FINRA found that the firm did not implement a reasonably designed AML programme from September 2021 to February 2025 — a span of nearly three and a half years.
Until February 2023, Pictet's monitoring relied on manually compiled daily reports. FINRA found these reports could not effectively identify patterns of suspicious activity. As a result, Pictet failed to detect or investigate red flags that were visible in its own data: instances where customers' trading represented more than 20 per cent of total daily market volume on individual days. The firm also failed to implement a reasonably designed due diligence programme for its foreign financial institution correspondent accounts, including periodic reviews of FFI account activity.
Blue Ocean ATS: When Growth Outran Compliance
The concurrent action against Blue Ocean ATS is separately instructive. Blue Ocean handles approximately 95 per cent of all overnight US equity trading volume — a position of extraordinary market significance. Yet from at least January 2023, the firm's AML monitoring for low-priced securities consisted primarily of manual reviews by a single employee reviewing a wash sale report and a low-priced securities report. The firm conducted no surveillance for spoofing, layering, or other manipulative order entry patterns.
FINRA's Bill St. Louis, Executive Vice President and Head of Enforcement, said: "Firms that engage in high-risk business activity must implement AML programmes that are appropriately designed for their specific risk profile. Blue Ocean's and Pictet's monitoring systems were inadequate given their customers' low-priced securities trading. These firms failed to implement the robust surveillance necessary to detect suspicious activity in an area where such risks are well-established."
Why Warnings Received and Not Acted On Are Treated as Aggravating Factors
A $610,000 penalty is not large by the standards of the cases appearing in this column. What makes the Pictet case notable is the sequence: a regulator raised the alarm in 2021, the firm acknowledged the deficiency, and three and a half years of non-compliant operations followed. That gap — between knowing about a problem and fixing it, while continuing to process high-risk transactions — is exactly what FINRA's enforcement programme targets.
The low-priced securities market has been an identified risk for two decades. FINRA has published specific guidance on it and flagged the sector repeatedly in its Annual Regulatory Oversight Report. The persistence of these enforcement actions suggests that compliance programmes continue to be sized for average business, not for the actual risk profile of the transactions being processed.
For CFD and forex brokers who operate in markets equally attractive to wash trading and manipulation, the lesson is not about the size of the fine. It is about what happens when warnings are received and not acted upon quickly enough.
Editor's note: Pictet Overseas Inc. is a US broker-dealer and a subsidiary of Pictet Group, a Swiss private bank and asset manager. Both Pictet Overseas and Blue Ocean ATS consented to FINRA's findings without admitting or denying the charges. The full consent orders are publicly available through FINRA's disciplinary actions database.