Independent Canadian investment bank Canaccord Genuity Group Inc. CF-T has agreed to pay more than $100-million in fines for willfully breaking American banking laws.
The settlement agreement announced Friday between Canaccord and three U.S. financial regulators is the result of nearly three years of investigations and represents the largest penalty ever imposed against a broker-dealer for violating the U.S. Bank Secrecy Act. The Financial Crimes Enforcement Network, or FinCEN, which is part of the U.S. Treasury Department, said Canaccord failed to report “numerous securities fraud schemes that caused significant economic harm to innocent investors.”
Canaccord’s anti-money-laundering surveillance program, according to the U.S. Securities and Exchange Commission, “not only relied on inadequately designed exception reports to flag suspicious activity, but Canaccord personnel failed to review or investigate activity that was flagged and then falsified documentation to cover up those failures.”
The total US$80-million penalty, which Canaccord said in a statement equates to roughly $109.4-million in Canadian dollars, will be partially deferred if the company complies with the terms of the settlement agreement. That will result in a total financial impact to Canaccord of US$75-million, the company said, or roughly $102.6-million.
Between February, 2019, through March, 2022, the regulators said Canaccord failed to file at least 160 suspicious activity reports. The Financial Industry Regulatory Authority, the third regulator involved in Friday’s settlement agreement, had identified deficiencies in Canaccord’s AML program as early as 2013, the FinCEN order said.
“Today’s action should be a wake-up call to broker-dealers that willfully fail to comply with their obligations to safeguard the financial system from illicit actors,” FinCEN director Andrea Gacki said in a statement.
Until late 2021, the FinCEN order said just four Canaccord employees, each of whom maintained responsibilities other than trade surveillance, were tasked with reviewing more than 100 unique reports, “many of which were daily reports and some of which produced thousands or millions of combined line items to review each year.”
“Canaccord’s deficient staffing was a significant factor in certain of these reports going unreviewed for long stretches,” the order said. “Across its trading lines of business (including its market making business), for stretches of time ranging from months to four years, Canaccord entirely failed to review its low-priced, low-volume, pump and dump, self-trading, and wash sales reports.”
In June, 2023, Canaccord first warned investors it was facing a potentially “significant penalty” related to its wholesale market-making business. Nearly two years later, in April, 2025, Canaccord sold that business to Cantor Fitzgerald.
In its statement Friday, Canaccord said that over the past three years, the company “has undertaken a comprehensive transformation of its compliance framework to address these matters and more fully align with regulatory expectations.”
Those efforts included hiring more supervisory and compliance staff, implementing new surveillance and review protocols and hiring third-party consultants to review its AML program.
“Since these matters came to light, we have overseen a wholesale change in compliance leadership and oversight,” Michael Auerbach, Canaccord’s lead independent director, said in the company’s statement.
The company did not respond to a request for further comment.
Last November, Canaccord announced it had set aside US$75-million to pay penalties related to the U.S. regulatory investigation. The company said Friday that the financial impact of the settlement is not expected to have any material impact on its continuing financial position.
The penalty significantly exceeds Canaccord’s quarterly profit. On Feb. 13, the company reported total net income of $80.5-million before taxes for its most recent quarter. That’s more than double the profit Canaccord earned during the same three-month period one year earlier.