Wall Street’s Favorite Trick: Repeat the Crime, Pay a Smaller Fine

Sonenshine & Company LLC is an eight-person investment banking firm headquartered in New York City. The firm works as a placement agent for private investments and advises on mergers and acquisitions — the kind of financial work that puts it directly in the flow of serious money. That makes anti-money laundering compliance not a bureaucratic nicety, but a legal and moral obligation.

The Financial Industry Regulatory Authority (FINRA) opened an investigation through a routine examination of the firm and found that Sonenshine had been running an illegal AML program since at least July 2017. The violations fell into two categories: the firm failed to build any real system for responding to federal law enforcement requests, and it failed to conduct required annual independent testing of its AML compliance program.

The cherry on top? FINRA had already censured and fined Sonenshine $15,000 (about what a full-time minimum wage worker earns in seven months) in October 2011 for almost identical failures covering 2006 through 2010. The firm collected that penalty, nodded, and proceeded to repeat the same violations for another decade-plus.

The Revolving Door of Regulatory Slaps on the Wrist

The 2011 fine covered failures in AML testing and training. The 2025 settlement covers failures in AML testing and FinCEN request compliance. The pattern is identical. The only thing that changed was the fine went up by $5,000 (from $15,000 to $20,000) despite the new violation window being more than twice as long.

To be precise: the 2011 fine covered roughly four years of violations. The 2025 settlement covers violations from July 2017 through December 2023 — over six years — plus ongoing failure to implement adequate FinCEN procedures that stretched all the way to the filing date. More time. More violations. Slightly bigger fine. Same firm. Same result.

The Non-Financial Ledger: What This Actually Costs the Rest of Us

Six months. From March 2021 through August 2021, Sonenshine & Company received requests from the Financial Crimes Enforcement Network (FinCEN) — a federal bureau whose entire purpose is to find money launderers, financial fraudsters, terrorist financiers, and other financial predators — and the firm did nothing. Zero searches. Zero responses. The firm was not even aware it had received these requests until FINRA came knocking later that year.

FinCEN requests exist because of Section 314(a) of the USA PATRIOT Act. These are not optional compliance exercises. Law enforcement agencies submit specific names and accounts they want broker-dealers to check against their records. When a firm like Sonenshine ignores those requests, it creates a gap in the surveillance net designed to catch real criminals moving real money through real financial institutions. That gap is not abstract. Every month of delay is a month a flagged individual or entity can continue operating through legitimate financial channels.

Sonenshine operates as a placement agent for private placements. Private placements are investment deals conducted outside the public market, with fewer disclosure requirements and fewer external eyes watching. They are a known vector for financial crime, which is precisely why the AML rules exist for firms like this one. An investment bank that handles private placements and simultaneously refuses to build a real AML program is not just cutting corners on paperwork. The firm created the conditions under which its own transactions could facilitate harm and left federal law enforcement without the information it was legally entitled to have.

They Knew. They Just Didn’t Care.

The betrayal embedded in this case is not confusion or bureaucratic failure. FINRA issued a direct, specific warning to Sonenshine in 2017 that its FinCEN response procedures were non-compliant. FINRA also warned the firm in 2017 that it was required to conduct annual AML independent testing. The firm’s written procedures did not require annual testing. They required testing every two years. That mismatch between what the law required and what Sonenshine’s own written policy said existed for years after the warning, until at least December 2023.

This means that for at least six years after being formally told by their own regulator that they were breaking the law, Sonenshine’s leadership chose not to fix it. The firm did not conduct independent AML testing in at least 2020 and 2022 — years when such testing was legally mandatory. There is no version of this story where a small eight-person firm with one office simply did not know about the requirements. The regulator delivered the warning in person. Management received it. Management shrugged.

The human cost of broken AML systems is diffuse and hard to trace, and that is exactly why it is so dangerous. Money laundering does not just involve dirty money becoming clean. It enables drug trafficking organizations to fund operations. It enables corrupt foreign officials to hide stolen public funds. It enables sanctions evasion. When a licensed U.S. broker-dealer refuses to participate in the surveillance system designed to detect these things, it provides a layer of operational cover — even if unintentionally — to the people that system was built to catch. Sonenshine’s leadership did not build that system for six-plus years while operating as a government-licensed financial intermediary.

Legal Receipts: The Document Speaks for Itself

“From July 2017 to the present, Sonenshine failed to establish and implement reasonable policies, procedures, and internal controls for timely reviewing and responding to FinCEN requests. The firm’s written AML procedures fail to provide any guidance on how to search firm records in response to FinCEN requests.” — FINRA AWC No. 2021069276401, Facts and Violative Conduct, Section B

“In 2017, FINRA warned Sonenshine that it was not complying with Rule 3310(b) as to FinCEN requests. Despite this, from July 2017 to the present, Sonenshine failed to establish and implement reasonable policies, procedures, and internal controls for timely reviewing and responding to FinCEN requests.” — FINRA AWC No. 2021069276401, Facts and Violative Conduct, Section B

“The firm did not review or respond to any FinCEN requests from March 2021 through August 2021. The firm was unaware of these failures until FINRA identified them in 2021.” — FINRA AWC No. 2021069276401, Facts and Violative Conduct, Section B

“FINRA warned Sonenshine in 2017 that it was required to conduct annual AML independent testing. Despite this, the firm’s written AML procedures only required such testing every two years until December 2023. Furthermore, the firm failed to conduct AML independent testing in at least calendar years 2020 and 2022.” — FINRA AWC No. 2021069276401, Facts and Violative Conduct, Section C

“In October 2011, Sonenshine was censured and fined $15,000 for, among other things, failing to provide for independent anti-money laundering (AML) testing and failing to provide adequate ongoing AML training for firm personnel from September 2006 through June 2010.” — FINRA AWC No. 2021069276401, Background Section

Societal Impact: Who Gets Hurt When AML Breaks Down

Economic Inequality: The Rules Only Apply to People Without Lawyers

A $20,000 fine (roughly what a full-time worker earning $12/hour makes in an entire year) is the penalty for six-plus years of systemic AML failure at a firm that handles private placement deals. Private placements typically involve investments of hundreds of thousands to millions of dollars. The math here is insulting on its face. The people who paid that fine — in one lump sum, with no payment plan, no jail time, and no admission of wrongdoing — manage the kind of money most Americans will never see in a lifetime.

The two-tier system on display here is stark. When an ordinary person bounces a check, banks charge them $35. When an investment bank spends six years running a broken anti-money laundering program after receiving a direct federal warning, the penalty is $20,000 (roughly the cost of a mid-tier used car). The economic system does not treat financial crime at the top of the income ladder the way it treats financial mistakes at the bottom.

The fine escalation across the two enforcement actions tells the full story: the 2011 penalty was $15,000 for four years of violations. The 2025 penalty was $20,000 for six-plus years of violations. The financial disincentive to comply actually decreased on a per-year basis. A $15,000 fine spread across four years works out to $3,750 per year of illegal conduct. The $20,000 fine spread across six years works out to roughly $3,333 per year. Compliance costs more than the fine. That is the incentive structure the regulator has built.

Public Safety: The Point of AML Is to Catch Real Criminals

Anti-money laundering law exists because financial institutions are one of the primary tools that criminal networks use to move money, fund operations, and hide assets from law enforcement. The Bank Secrecy Act, the USA PATRIOT Act’s Section 314(a) mechanism, and FinCEN’s information-sharing system form the backbone of the U.S. government’s ability to surveil money flows associated with drug trafficking, terrorism, human trafficking, tax evasion, sanctions violations, and corruption.

When Sonenshine spent six months ignoring FinCEN requests in 2021, those requests came from law enforcement agencies actively investigating specific named individuals, entities, or organizations. The firm’s records could have contained account relationships or transaction histories relevant to those investigations. Instead, because Sonenshine had no procedures, no monitoring, and no awareness that requests had even arrived, federal investigators received nothing. The source document confirms the firm did not even know it had received these requests until FINRA conducted its examination.

The failure of independent AML testing in 2020 and 2022 compounded the problem. Independent testing exists to catch exactly this kind of breakdown before it causes harm. The firm skipped those testing years entirely — during a period when financial crime surged globally due to pandemic-era economic disruption. An untested AML program is a program that cannot detect its own failures, by definition. Sonenshine ran that system for years without looking at whether it worked.

The Numbers, Laid Bare

What Now: The People Responsible and What You Can Do

Leadership on the Record

The Watchlist: Who Should Be Doing More

What You Can Actually Do Right Now

Look up every broker-dealer you do business with on FINRA BrokerCheck (finra.org/brokercheck) — the same database that would have shown Sonenshine’s 2011 violation to anyone who looked. Most people never check. The information is public and free.

Contact your elected representatives and demand they push for mandatory minimum fines tied to a percentage of firm revenue for AML violations, rather than flat dollar amounts that function as mere licensing fees for lawbreaking. A firm that handles multi-million-dollar private placements should face penalties calibrated to that scale, not the scale of a neighborhood dry cleaner.

Support organizations working on financial transparency, anti-corruption, and corporate accountability: Global Financial Integrity (gfintegrity.org), the Financial Accountability and Corporate Transparency (FACT) Coalition, and your local mutual aid networks. Regulatory agencies capture headlines. Grassroots financial watchdogs do the unglamorous work of tracking patterns that regulators miss or ignore. Fund them. Amplify them. Show up for them.