Securities firm to pay $50,000 fine

A small Raleigh securities firm that caters to foreign customers has agreed to pay $50,000 in fines after federal regulators accused it of violating the Bank Secrecy Act and failing to comply with an anti-money laundering rule that requires verifying its customers' identities.

The broker-dealer, Pinnacle Capital Markets, neither admitted nor denied the allegations by the Securities and Exchange Commission and the Financial Crimes Enforcement Network, or FinCEN.

"Left unchecked, Pinnacle's business model yields significant money laundering risks," said Robert Khuzami, director of the SEC's enforcement division, in a prepared statement. "If a broker-dealer provides customers with direct access to the U.S. securities markets, it must comply with the applicable customer identification rules."

A man who answered the phone at the company's headquarters declined to comment. The SEC says Pinnacle, formed in 2002, has failed to verify the identities of all of its customers as it is required to do. The investigation found that, from October 2003 to August 2006, Pinnacle didn't verify the identities of 34 out of a sample of 55 of its corporate accounts. The SEC also said it did not collect or verify identifying information for "the vast majority" of the sub-accounts.

Pinnacle has agreed to pay a $25,000 fine to settle the SEC allegations, plus $25,000 to settle allegations by FinCEN.

Pinnacle also agreed to a cease-and-desist order issued by the SEC.