FINRA Fines Cetera $1.1 Million Over Anti-Money Laundering Failures
The Financial Industry Regulatory Authority has censured and fined three independent broker-dealers within the Cetera Financial Group network a total of $1.1 million. The sanctions stem from extensive lapses in the firms’ anti-money laundering, or AML, programs and supervisory systems, particularly regarding the handling of high-risk, low-priced securities.
The settlement, finalized in January 2026, named three subsidiaries: Cetera Advisors LLC, Cetera Wealth Services LLC (formerly Cetera Advisor Networks), and Cetera Investment Services LLC.
From March 2019 through August 2021, FINRA found that the Cetera firms’ AML programs were not reasonably designed to detect or report suspicious transactions involving “penny stocks” or low-priced securities. During this period, Cetera customers collectively sold approximately 800 million shares of these volatile securities.
Despite numerous red flags, FINRA alleged the firms failed to investigate cases instances where: customers’ trading represented as much as 88% of a security’s daily market volume; unrelated customers opened accounts at nearly the same time to deposit and immediately sell the same low-priced securities, i.e., coordinated liquidations; and customers acted as “promoters” for the very issuers whose stock they were liquidating.
In one instance at Cetera Advisors, three ostensibly unrelated customers deposited more than 100 million shares of an over-the-counter issuer and liquidated them for approximately $375,000 without triggering a suspicious activity review.
FINRA also cited Cetera Advisors for separate failures occurring between 2017 and 2021. The firm reportedly failed to reasonably supervise the creation of tens of thousands of “consolidated reports” – financial documents that combine information on a client’s internal holdings with assets held elsewhere.
Registered representatives were permitted to manually enter asset valuations into these reports without a system in place to verify their accuracy or ensure the data was not misleading, according to FINRA. Furthermore, the firm failed to preserve these reports in its official books and records, as required by law.
The Cetera firms accepted the censure and fine without admitting or denying FINRA’s findings. As part of the settlement, senior management must certify within 180 days that the firms have remediated the identified deficiencies and implemented compliant AML and supervisory programs.
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