Administrative monetary penalty on Canaccord Genuity Corp.

From: Financial Transactions and Reports Analysis Centre of Canada (FINTRAC)

[2025-07-03]

Canaccord Genuity Corp., an investment dealer headquartered in Vancouver, British Columbia, considered as a securities dealer, was imposed an administrative monetary penalty of $544,500 on May 14, 2025, for committing 4 violations. The violations were found during the course of a compliance examination in 2023. The administrative monetary penalty has been paid in full and proceedings have ended.

Nature of violation

Violation #1

Failure to submit suspicious transaction reports where there were reasonable grounds to suspect that transactions were related to a money laundering or terrorist activity financing offence – Proceeds of Crime (Money Laundering) and Terrorist Financing Act (the Act), section 7

Canaccord Genuity Corp. failed to submit 3 suspicious transaction reports out of 100 case files where there were reasonable grounds to suspect that one or more transactions or attempted transactions were related to the commission or attempted commission of a money laundering or terrorist activity financing offence. FINTRAC’s examination revealed gaps in the organization’s due diligence review process, and identified a number of indicators, such as open source references, that were not considered during Canaccord Genuity Corp.’s review of its high-risk clients.

The 3 instances are as follows:

• Canaccord Genuity Corp. realized through FINTRAC’s examination that a client entity did not fulfill the intended purpose of the account and consequently closed the account. As such, Canaccord Genuity Corp.’s review failed to consider the multiple money laundering and terrorist activity financing indicators present for this high-risk client entity. The indicators present included the use of multiple foreign bank accounts for no apparent reason, common identifiers such as an address being used by multiple clients that appear to be unrelated, and the presence of information that is misleading and vague.
• Canaccord Genuity Corp. did not account for important indicators pertaining to a high-risk client. Specifically, Canaccord Genuity Corp. received a payment order from a government agency with respect to a high-risk client and was aware of relevant negative media.
• Canaccord Genuity Corp. discounted crucial money laundering and terrorist activity financing indicators in the course of its periodic reviews, such as relevant negative media articles. Despite these relevant indicators being present, Canaccord Genuity Corp. failed to conduct an adequate review and assessment of the client’s transactions against money laundering and terrorist activity financing indicators.

FINTRAC’s examination found that Canaccord Genuity Corp.’s transaction and due diligence review to be ineffective in assisting the organization to analyze, identify and ultimately report suspicious transaction reports in a timely manner.

Violation #1 is classified by regulations as a Very Serious violation. The imposed penalty takes into account the criteria in section 73.11 of the Act and section 6 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Administrative Monetary Penalties Regulations.

Violation #2

Failure of a person or entity to develop and apply written compliance policies and procedures that are kept up to date and, in the case of an entity, are approved by a senior officer – Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations, paragraph 156(1)(b)

FINTRAC determined that Canaccord Genuity Corp. did not document and apply the necessary measures in its compliance policies and procedures to meet all of its obligations under the Act and associated Regulations.

FINTRAC’s examination determined that Canaccord Genuity Corp. did not sufficiently develop and document its compliance policies and procedures in relation to reporting and know your client requirements. Also, Canaccord Genuity Corp. had insufficient ongoing monitoring measures for its business relationships. Furthermore, the reporting timeframes and process for submitting suspicious transactions or attempted suspicious transactions and terrorist property reports were lacking or not accurately documented. Finally, its policies and procedures did not reflect measures to address the requirements under the Ministerial Directive on the Democratic People’s Republic of Korea (DPRK) published on December 9, 2017.

Violation #2 is classified by regulations as a Serious violation. The imposed penalty takes into account the criteria in section 73.11 of the Act and section 6 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Administrative Monetary Penalties Regulations.

Violation #3

Failure of a person or entity to assess and document the risk of a money laundering offence or a terrorist activity financing offence, taking into consideration prescribed factors – Proceeds of Crime (Money Laundering) and Terrorist Financing Act, subsection 9.6(2) and Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations, paragraph 156(1)(c) and subsection 156(2)

Canaccord Genuity Corp.’s risk-based assessment was incomplete, as it did not clearly outline an adequate methodology for the assessment of its money laundering and terrorist activity financing risks. Specifically, Canaccord Genuity Corp.’s risk assessment failed to thoroughly assess and document the money laundering and terrorist activity financing risks related to products, services and delivery channels, geographic locations and its foreign and domestic affiliates.

Violation #3 is classified by regulations as a Serious violation. The imposed penalty takes into account the criteria in section 73.11 of the Act and section 6 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Administrative Monetary Penalties Regulations.

Violation #4

Failure to take the prescribed special measures for high risk – Proceeds of Crime (Money Laundering) and Terrorist Financing Act, subsection 9.6(3)

FINTRAC’s assessment revealed that Canaccord Genuity Corp. failed to consistently apply the enhanced due diligence measures on all their high-risk clients. FINTRAC sampled 14 files from high-risk clients and found a lack of updates with respect to beneficial ownership and know your client information. Details were either not updated at all or not updated within the frequency established for high-risk clients.

Violation #4 is classified by regulations as a Serious violation. The imposed penalty takes into account the criteria in section 73.11 of the Act and section 6 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Administrative Monetary Penalties Regulations.

Related link

• News Release : FINTRAC imposes an administrative monetary penalty on Canaccord Genuity Corp.