Banorte Unit Fined by U.S. Over Anti-Laundering Lapses

By Anthony Harrup 

MEXICO CITY--An American regulator has fined a U.S. unit of Mexico's Grupo Financiero Banorte SAB $475,000 for alleged failures in its anti-money-laundering procedures, which it said allowed suspicious transactions to go unreported.

The Financial Industry Regulatory Authority said on Tuesday that it levied the fine against Banorte-Ixe Securities International, Ltd., a New York-based securities firm that services Mexican clients investing in U.S. and global securities.

"Banorte Securities opened an account for a corporate customer owned by an individual with reported ties to a drug cartel and did not detect, investigate or report the suspicious rapid movement of $28 million in and out of the account," Finra said. It didn't identify the customer.

Finra said Banorte Securities failed to investigate a number of suspicious activities, including multimillion-dollar deposits and withdrawals in a short period of time.

Other faults included not adopting anti-money-laundering procedures adequately and failure to register between 200 and 400 foreign finders, or people who refer clients to U.S. brokerages, who had interacted with the firm's Mexican clients, Finra said.

Finra said Banorte Securities and the firm's former anti-money-laundering and chief compliance officer "neither admitted nor denied the charges but consented to the entry of Finra's findings."

In a filing with the Mexican stock exchange, Banorte said the unit will pay the fine in full and added it has taken corrective measures to comply with regulatory requirements.

"The management of Grupo Financiero Banorte is permanently committed to complying with applicable regulations in all the jurisdictions where its units operate," Banorte said. It added that U.S. authorities "have increasingly questioned the business of Latin American institutions."

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