Stash Capital Fined By FINRA Over AML and Identity-Theft Control Failures | LeapRate | Online Trading Industry News, Broker Intelligence & Fintech Analysis
Stash Capital LLC has been censured and fined $450,000 by the Financial Industry Regulatory Authority after the regulator found the firm failed to maintain adequate anti-money-laundering and identity-theft controls between January 2019 and June 2023.
FINRA said Stash Capital, which offers self-directed online brokerage accounts and has opened more than nine million accounts since launch, did not implement a customer identification programme proportionate to the size and risk of its business.
Investigators found accounts were approved without full identity verification, including cases where only partial Social Security numbers were provided or where indicators of potential identity fraud were overlooked.
The regulator also found the firm lacked sufficient procedures to detect and report suspicious transactions, relying heavily on automated alerts for deposits and withdrawals while failing to connect red flags identified during account opening with later activity.
FINRA cited instances where multiple accounts shared common phone numbers or email address patterns without being flagged.
Stash Capital was also found to have failed to maintain a reasonable identity-theft prevention plan. FINRA said the firm relied on customer-reported issues and clearing-firm notifications and did not implement timely controls despite known risks.
The firm consented to the sanctions without admitting or denying the findings.
