April 4, 2011, 1:14 PM ET

http://blogs.wsj.com/corruption-currents/2011/04/04/finra-expels-ais-financial-over-aml-violations/

A Financial Industry Regulatory Authority hearing panel has expelled AIS Financial Inc. for failing to implement and enforce an anti-money laundering program.

The Westlake Village, Calif.-based broker-dealer failed to identify, investigate and report suspicious penny stock activity in three cases from November 2005 to December 2007, according to the Finra statement.

In one case cited in the statement, AIS failed to report suspicious activity in accounts held by a money management firm in Costa Rica that had previously been a subject of an enforcement action by the Securities and Exchange Commission, Finra said. The firm was allowed to maintain two accounts that drew in more than $3 million in sales, earning it more than $53,000 in commissions.

The broker-dealer also permitted five accounts to be opened by a customer and his nephew, who had disciplinary histories and indictments for engaging in organized criminal activity and money laundering, Finra said.

“AIS Financial voluntarily withdrew from Finra as a broker-dealer on 12/31/2010,” said a spokesman for the firm who declined to be named. “Finra basically expelled a firm that had already closed its doors.”