FINRA ordered Wells Fargo's employee and independent broker-dealers to jointly pay $1.5 million for failing to follow required anti-money laundering procedures.

Over a nine year period, Wells Fargo Advisors and Wells Fargo Advisors Financial Network failed to properly perform a required identity verification process on approximately 220,000 new client accounts, regulators said. When imposing the fine, FINRA said it took into account that the firm discovered the issue, reported it and took actions to correct the problem.

Without admitting or denying the charges, the two units consented to FINRA's findings, according to the agency.

A Wells Fargo spokeswoman declined to comment.

Broker-dealers are obligated to maintain a client identification program as part of anti-money laundering compliance requirements, according to FINRA. The agency said the Wells Fargo system contained a design flaw that sometimes recycled old client identification information for new client accounts, meaning that required identification checks were not performed on new accounts.

"While the firms eventually discovered the flaw in their own systems, it took far too long, resulting in hundreds of thousands of accounts to open and often close without the required identification process ever taking place," Brad Bennet, FINRA's chief of enforcement, said in a statement.

FINRA also said that approximately 120,000 accounts that were not subjected to identity verification procedures were closed before the firms were aware of the design flaw.

This was not the largest fine that FINRA has imposed for anti-money laundering compliance failures. In February, FINRA ordered Brown Brothers Harriman to pay a record $8 million fine for its "failure to have an adequate anti-money laundering program in place to monitor and detect suspicious penny stock transactions."

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