FINRA fined Raymond James $17 million for "widespread failures" in the firm's anti-money laundering compliance program, making it the largest penalty that the regulator has dished out for that type of infraction, a spokeswoman says.

The failures occurred in Raymond James' employee and independent channels, which were fined $8 million and $9 million respectively. FINRA also fined former Raymond James & Associates compliance officer Linda Busby $25,000 and suspended her for three months.

Raymond James has been a fast-growing firm through recruiting top wirehouse advisers and making key acquisitions, such as brokerage firm Morgan Keagan. The St. Petersburg, Fla-based firm recently reported that it had roughly 6,700 advisers – making it almost as large as UBS.

However, FINRA says the firm's growth spurt from 2006 to 2014 wasn't matched by commensurate growth in the firm's anti-money laundering compliance systems and processes.

The regulator says Raymond James was relying "upon a patchwork of written procedures and systems across different departments to detect suspicious activity," and that some red flags went unnoticed.

Brad Bennett, FINRA's Executive Vice President and Chief of Enforcement says Raymond James' missteps are particularly "egregious" because the firm's independent broker-dealer had been fined for similar issues in 2012.

"The monitoring for suspicious transactions is an essential part of protecting our financial system and firms must allocate adequate resources to their AML compliance efforts. This case demonstrates that when there are broad-based failures within specific areas of responsibility, we will seek individual liability where appropriate," Bennett says in a statement.

FINRA says that Raymond James' two channels neglected to do periodic risk reviews for foreign financial institutions and that Busby failed to ensure that Raymond James & Associates' reviewed were properly conducted.

The firm neither admitted nor denied the charges, but consented to the entry of FINRA's findings.

Busby, who ceased to work at Raymond James in 2015 according to FINRA BrokerCheck records, could not be reached for comment.

Steve Hollister, director of public communications at Raymond James, says the firm has engaged in significant upgrades in its compliance program.

"These include a marked increase in our AML associates, hiring a new chief AML officer with extensive experience, expanded training for all associates, and the integration of Mantas, a leading AML software solution, to better monitor and detect suspicious activity," he says in a statement.

Hollister adds that the firm has also started to exit its third-party foreign correspondent business, excluding operations in Europe and Canada.

"We will continue to refine our program to address evolving regulatory expectations and ensure we are doing our part to reduce criminality in the financial system," he says.