The SEC has settled charges against Haywood Securities (USA) Inc., a Canada-based broker-dealer registered with the Commission, over failures to file certain Suspicious Activity Reports with FinCEN. According to the SEC's September 11, 2026 order, Haywood USA failed to adequately implement its own anti-money laundering policies and procedures from at least May 2021 through January 2026. The case is significant because the Commission identified several categories of red flags: accounts connected to publicly known criminal activity, rapid deposit-and-liquidation patterns involving low-priced securities, high-risk accounts that were not properly monitored, and potential customers the firm declined to open but still did not report. Haywood USA agreed to a censure, a cease-and-desist order and a $750,000 civil penalty.
U.S. Securities and Exchange Commission (SEC)
Official Release: https://www.sec.gov/files/litigation/admin/2026/34-106333.pdf
NEWS:
The SEC's order identifies Haywood USA as a British Columbia-incorporated broker-dealer that has been registered with the Commission since 1997. It is a wholly owned subsidiary of Haywood Securities Inc., a Canadian investment dealer regulated by the Canadian Investment Regulatory Organization. Haywood USA's principal office is in Vancouver, and the SEC states that its registered representatives and compliance personnel were also employed by Haywood Canada and dually registered in Canada and with FINRA in the United States. This cross-border structure is important because the case involves a U.S.-registered broker-dealer operating through personnel and systems connected to a Canadian investment-dealer platform.
The SEC found that Haywood USA's AML procedures required the firm to review for suspicious-activity red flags, investigate those red flags and determine whether a SAR filing was required. The Commission said the firm failed to adequately implement those procedures. Examples included failures at account opening, failures to include certain high-risk accounts in heightened monitoring, insufficient ongoing monitoring, and inadequate training of registered representatives regarding the SAR rule. The SEC also stated that registered broker-dealers must file SARs for certain suspicious transactions involving at least $5,000 when they know, suspect or have reason to suspect that the transaction falls within the SAR rule.
The order describes several red-flag patterns. In one example, Haywood USA allegedly opened an account for a limited liability company connected through ownership and trust structures to a publicly known convicted criminal, while also knowing that the account was intended to deposit several hundred million dollars of a single issuer's shares and immediately liquidate them. In another example, the firm allegedly handled activity involving a structure created after a foreign bank executive resigned and had accounts frozen in connection with a fraud investigation. Other examples involved newly created entities, low-priced securities, rapid share deposits, immediate sales, wires out of the account and closing the account shortly after liquidation.
The SEC also focused on situations where Haywood USA declined to open customer accounts but still did not file SARs. In June 2024, one potential customer planned to deposit and liquidate more than 60 million shares of a low-priced issuer whose name had changed twice between 2019 and 2022. In January 2026, another potential customer was a former registered representative with a prior FINRA action, appeared to be located outside the United States despite providing U.S. identification information, and had identified involvement with someone convicted of running an investment fraud scheme. The SEC found that Haywood USA did not file SARs in those circumstances despite the red flags its compliance personnel had identified.
Haywood USA settled without admitting or denying the SEC's findings. The Commission censured the firm, ordered it to cease and desist from future violations of Exchange Act Section 17(a) and Rule 17a-8, and imposed a $750,000 civil penalty. The SEC also noted remedial steps, including revisions to AML policies and procedures, increased AML compliance staffing, retention of a third-party consultant to enhance annual AML reviews and testing, and new supervision and review protocols.
WHY THIS CASE MATTERS:
The Haywood USA case is useful because it shows that AML enforcement is not limited to completed transactions that are later proven criminal. Broker-dealers are expected to identify and investigate red flags, and in some circumstances a SAR may be required even when the firm declines to open the account. That makes the quality of the firm's escalation process just as important as its final onboarding decision.
The case also has a strong cross-border due-diligence angle. Haywood USA was a U.S.-registered broker-dealer connected to a Canadian investment-dealer group, with personnel registered across both markets. For investors, issuers and compliance teams, the matter shows why cross-border securities activity involving low-priced shares, rapid liquidation and offshore or trust structures can create AML obligations under U.S. broker-dealer rules even when the firm's broader business footprint is Canadian.
KEY POINTS:
- Haywood Securities (USA) Inc. has been registered with the SEC as a broker-dealer since 1997.
- The firm is incorporated in British Columbia and based in Vancouver.
- It is a wholly owned subsidiary of Haywood Securities Inc., a Canadian investment dealer.
- The SEC found AML and SAR failures from at least May 2021 through January 2026.
- The order involved suspicious-activity red flags connected to account opening, high-risk accounts, low-priced securities and rapid deposit-sale-withdrawal activity.
- The SEC said Haywood USA failed to file certain SARs with FinCEN.
- The Commission also cited inadequate implementation of the firm's own AML policies and procedures.
- Haywood USA undertook remedial steps, including staffing, policy and consultant-related improvements.
- The firm agreed to a censure, cease-and-desist order and $750,000 civil penalty.