L.A. Broker-Dealer First Sanctioned Under Patriot Act

Broker-dealer Crowell, Weedon & Co. has the distinction as the first ever to be subject to an enforcement action under the USA Patriot Act. The Securities and Exchange Commission has sanctioned the Los Angeles firm for failing to properly document its customer identification as required by the act, which is intended to protect the U.S. financial system from money laundering and terrorist financing. According to the SEC, between October 2003 and at least April 2004, Crowell Weedon did not document its actual customer verification procedures as they appeared in its customer identification program, but rather “simply relied on its registered representatives’ attestations that they had personal knowledge of the customers opening new accounts.”

Without admitting or denying the charges, Crowell Weedon has agreed to cease and desist committing any violations of the act. The firm faces no fines.