NEW YORK (Reuters) - Two E*Trade Financial Corp units were fined $1 million for failing to have proper anti-money laundering procedures to detect suspicious trades, the Financial Industry Regulatory Authority said on Friday.
The brokerage regulator said that between January 2003 and May 2007, E*Trade Securities LLC and E*Trade Clearing LLC failed to provide necessary automated tools to detect suspicious trading activity.
It also said the New York-based online brokerage relied too heavily on employees to manually monitor for such problems, while processing more than 110,000 trades a day with "little or no" human intervention.
"Such an approach to suspicious activity detection was unreasonable given E*Trade's business model," FINRA said.
E*Trade did not admit wrongdoing, but consented to FINRA's findings, the regulator said.
Shares of E*Trade rose 9 cents to $1.24 in afternoon trading on the Nasdaq.
(Reporting by Jonathan Stempel, editing by Leslie Gevirtz)
