Hit the bid: Brokers’ lax fincrime controls fuel abusive small-cap trading
- Becki LaPorte
- Jun 2
- 1 min read
As published in Compliance Corylated.
As regulators intensify scrutiny of abusive trading in small-cap and low-priced securities, firms are facing growing pressure to strengthen the financial crime controls that sit behind customer onboarding, surveillance, and risk monitoring programs. In this article, the discussion explores how weaknesses in AML and KYC frameworks can create opportunities for market manipulation schemes to flourish, and why recent FINRA enforcement actions suggest many firms are still falling short.
The article features insights from FinScan’s Becki LaPorte, who highlights a critical challenge facing the industry: compliance programs must be backed not only by technology and policies, but by experienced professionals capable of identifying evolving financial crime risks. Her commentary underscores that firms operating in higher-risk trading environments need stronger expertise, more effective controls, and a deeper understanding of how financial crime, market abuse, and customer risk intersect—particularly as regulators place increasing emphasis on the effectiveness, rather than simply the existence, of compliance programs.
