Member Firm Disciplined for Anti-Money Laundering Program and RE-3 Reporting Deficiencies

* An NYSE hearing officer found that from January through June 2003, the firm was not in complete compliance with the requirements for establishment of an anti-money laundering ("AML") program.
* The firm's anti-money laundering program was deficient in that it did not include written procedures detailing the process utilized and the time requirements for filing Suspicious Activity Reports ("SAR"). Additionally, the procedures did not identify the process for determining when an item reviewed by the firm became suspicious so as to warrant an SAR filing.
* The firm did not establish an adequate review for structuring transactions designed to evade reporting requirements under the Bank Secrecy Act; nor did the firm's AML department conduct any reviews for cash equivalent deposits and the firm's system did not have the ability to adequately identify cash equivalent deposits out of other types of deposits, such as checks, in order to facilitate a structuring review.
* The firm did not have an adequate system for follow-up and review for the AML exceptions it accumulated. After its AML department flagged accounts that required additional follow-up, there was inadequate record-keeping to determine the status of the follow-up review.
* Additionally, the firm failed to make timely reports to the NYSE of its settlement of certain customer complaints.
* The NYSE hearing officer also noted the firm's improvements to its AML program, implementation of supervisory procedures to ensure timely filings of Form RE-3 reportable events, and cooperation in the investigation by the Division of Enforcement.

The NYSE imposed a penalty of a censure and a $90,000 fine. RBC Dain Rauscher, Inc. consented to the penalty. -www.nyse.com