OFAC Enforcement Action: Zulutrade fined $200,000

As part of a broader settlement (the CFTC also gets a taste), Zulutrade, Inc. agreed to a civil monetary penalty of $200,000 for violations of Sudanese, Iranian and Syrian sanctions programs.

Zulutrade permitted nationals from all 3 countries to place foreign exchange trades via its trading platform. In addition, eight funds transfers for $10,264.36 for two Iranian individuals were originated by the company.

The violations were not voluntarily self-disclosed, as the company apparently was unaware of its sanctions compliance requirements. Despite the very large base penalty ($844,090,000), this constituted a non-egregious case.

How do you get from $844,090,000 to $200,000? Here’s how (reformatting mine):

OFAC considered the following to be aggravating factors:

Zulutrade acted recklessly in maintaining accounts for, and placing FX trades on behalf of, persons subject
to U.S. sanctions without undertaking any measures to comply with OFAC regulations;

Zulutrade, including its senior management, had reason to know of the conduct that led to the
apparent violations;

Zulutrade’s actions caused harm to U.S. sanctions program objectives; and

Zulutrade did not have an OFAC compliance program in place at the time of the apparent
violations.

OFAC considered the following to be mitigating factors:

Zulutrade is a small
company with limited business operations;

Zulutrade has taken remedial action in response to the
apparent violations;

Zulutrade has not received a penalty notice or Finding of Violation in the
five years preceding the earliest date of the transactions giving rise to the apparent violations;
and

Zulutrade substantially cooperated with OFAC’s investigation.