FINTRAC Hits Canaccord Genuity with $544,500 Fine for Major Anti-Money Laundering Failures

In a significant regulatory move, the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) levied a fine of $544,500 against Vancouver-based investment firm Canaccord Genuity Corp in May 2025.

The penalty stems from major compliance breaches related to Canada's anti-money laundering (AML) and counter-terrorist financing (CFT) rules, underlining the government's intensified oversight of the securities industry.

Canaccord Genuity, a key player in Canada's financial markets and a registered securities dealer, was found in violation of multiple provisions of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) during a 2023 compliance examination.

The findings highlight systemic weaknesses that FINTRAC argues must be urgently addressed to preserve the integrity of Canada’s financial system.

According to FINTRAC’s enforcement disclosures, Canaccord Genuity failed in several critical areas:

• It did not submit suspicious transaction reports (STRs) when there were reasonable grounds to suspect money laundering or terrorist activity.

• The firm lacked current, board-approved compliance policies and procedures.

• There were inadequate risk assessments and insufficient documentation relating to potential ML/TF threats.

• It did not implement the mandatory enhanced measures for high-risk clients and transactions.

Though these violations did not result in criminal charges, FINTRAC viewed them as severe enough to merit one of the highest monetary penalties handed to a Canadian investment dealer in recent years. STRs are considered a linchpin in Canada's AML architecture, and failures in this area are taken particularly seriously. Such reports are vital to law enforcement efforts targeting financial crimes, including sanctions evasion, terror financing, and threats to national security.

Canaccord Genuity’s fine places it among a growing list of financial institutions facing enforcement under Canada’s evolving AML/CFT regime. In the 2023–2024 fiscal year alone, FINTRAC issued 12 Notices of Violation totaling over $26 million, with the securities sector increasingly in the regulator's crosshairs.

Under the PCMLTFA, securities dealers like Canaccord Genuity must fulfill a wide range of legal and compliance duties:

1. Reporting Requirements: They are obligated to file STRs, large cash transaction reports (over CAD 10,000), international electronic funds transfer reports, and virtual currency transaction reports. Failing to report not only invites penalties but also undermines public trust.

2. Compliance Programs: Firms must maintain robust compliance frameworks that include written policies, board-level approval, regular employee training, and periodic internal audits. These programs must be dynamic, updated regularly, and tailored to the firm’s business risks.

3. Risk Assessment and Enhanced Due Diligence: Dealers must assess the money laundering and terrorism financing risks across all business lines, and conduct enhanced scrutiny of high-risk clients and complex transactions.

4. Special Measures: When dealing with high-risk situations, firms must implement specific safeguards such as ongoing monitoring, deeper client vetting, and careful transaction reviews.

5. Recordkeeping and Client ID: They are also required to retain detailed records of all client identifications and transactions and must be ready to provide them to regulators or law enforcement upon request.

Canaccord Genuity’s failures demonstrate the complexities and persistent challenges facing securities firms, particularly in environments where global transactions, novel investment vehicles, and evolving criminal tactics make compliance increasingly difficult.

At the core of these failures is suspicious transaction reporting—a non-negotiable requirement that demands professional judgment and internal vigilance. FINTRAC has flagged several ongoing sector-wide issues:

• Subjectivity: Employees often miss or misjudge suspicious indicators, particularly in innovative or complex financial structures.

• Documentation Gaps: Poor internal recordkeeping can result in failures to recognize or report transactions that would otherwise meet STR thresholds.

• Training Deficiencies: Without current and continuous training, staff may lack awareness of new criminal typologies or risk indicators.

• Overreliance on Manual Systems: Many firms still depend on outdated review processes, lacking automation or analytical tools that could detect anomalies in real-time.

FINTRAC has issued extensive guidance to help institutions meet their obligations, but uptake across the industry has been inconsistent. The Canaccord case sends a clear signal that inaction or complacency will not be tolerated.

FINTRAC’s use of Administrative Monetary Penalties (AMPs) is central to its enforcement strategy. Unlike criminal sanctions, AMPs are designed to prompt corrective behavior, not punish. Since 2008, FINTRAC has issued more than 140 AMPs across a range of sectors—from banking and real estate to casinos and now, increasingly, securities dealers.

Recent enforcement trends show a focus on:

• Transparency: All AMPs are made public, exposing firms to reputational consequences and reinforcing regulatory expectations.

• Proportionality: Penalties are calculated based on the gravity and frequency of violations, along with remedial efforts and compliance history.

• High-Risk Sectors: The investment industry, due to its complexity and exposure to international financial flows, is under growing scrutiny.

• Collaborative Investigations: FINTRAC shares data with domestic and global partners, aiding in coordinated enforcement and asset tracing.

This regulatory action sends a powerful message to the investment sector. As FINTRAC raises the bar, firms are being called to strengthen internal compliance systems, enhance due diligence protocols, and foster a culture of proactive risk management.

The consequences for Canaccord extend beyond the financial penalty. The fine could prompt closer future oversight, increased compliance costs, and scrutiny from investors and counterparties. For the broader industry, the case reinforces that AML compliance is no longer a back-office task—it’s a strategic imperative.

Securities dealers across Canada must now confront the reality of higher regulatory expectations, more aggressive enforcement, and elevated risk if they fall short. FINTRAC’s stance is clear: “the days of minimal compliance are over.” Firms that fail to demonstrate genuine commitment to AML/CFT obligations risk not just fines, but their reputation and market position.

The path forward involves regular risk assessments, board-supported compliance policies, investment in modern monitoring tools, and continuous staff education. Transparency and accountability are no longer optional—they are the foundations of a resilient, trustworthy financial system.

FINTRAC’s fine against Canaccord Genuity is not just a cautionary tale; it is a catalyst. One that demands immediate action from every securities firm operating in Canada. 

By fLEXI tEAM