SEC Charges Broker-Dealer with Failing to Report Suspicious Transactions

ADMINISTRATIVE PROCEEDING
File No. 3-21319

March 2, 2023 - The Securities and Exchange Commission today announced settled charges against Utah-based brokerage firm Cambria Capital, LLC for failing to file Suspicious Activity Reports (SARs) on numerous transactions.

The SEC's order finds that from March 2017 through May 2019, Cambria failed to file SARs on suspicious activity that raised red flags identified in the firm's anti-money laundering policies and procedures. According to the order, most of the suspicious activity was associated with the liquidation of microcap securities, including the deposit of physical certificates; the liquidation of large quantities of microcap securities; and the immediate wire out of liquidation proceeds from customer accounts. In addition, the order also finds that in many of these transactions, the pattern of liquidations often occurred in combination with other red flags noted in Cambria's policies and procedures, such as unusually large deposits; suspicious wire activity; or multiple accounts simultaneously trading in the same microcap security.

The SEC's order finds that Cambria violated Section 17(a) of the Securities Exchange Act of 1934 and Rule 17a-8 thereunder, which require broker-dealers registered with the Commission to comply with the reporting, record-keeping, and record retention requirements of the Bank Secrecy Act. Without admitting or denying the findings, Cambria agreed to a settled cease-and-desist order that imposes a censure and a $100,000 penalty, and requires Cambria to retain an independent compliance consultant.

The SEC's investigation was conducted Adam S. Ross, Heather L. Freiburger, and Jeb Wildschut, and was supervised by Mary S. Brady, Nicholas P. Heinke, and Jason J. Burt of the Denver Regional Office.