FINRA Files Complaint Against Irvine Investment Banking CEO Keith Charles Moore and His Member Firms Alleging Failure to Implement Anti-Money Laundering Program for Small-Cap IPO Business

If you are a current or former client of Keith Charles Moore, Boustead Securities, LLC, or Sutter Securities Incorporated in Irvine, California, you should know that FINRA has filed a pending complaint against Moore and both of his member firms alleging that from January 2021 through December 2023, the firms failed to develop and implement a reasonably designed anti-money laundering program in connection with their investment banking business underwriting approximately 30 small-cap IPOs involving issuers based in China or other foreign jurisdictions, and that FINRA has separately made a preliminary determination to recommend disciplinary action against Moore for alleged failures to supervise trading in a senior customer’s accounts and to detect or respond to red flags of excessive and unsuitable trading in those accounts.

Keith Charles Moore (CRD# 5191450), former Compliance Officer, General Securities Principal, and General Securities Representative at Boustead Securities, LLC (CRD# 141391) and Sutter Securities Incorporated (CRD# 30770), both in Irvine, California.

Important notice: FINRA issued the following complaint. Issuance of a disciplinary complaint represents FINRA’s initiation of a formal proceeding, not a decision as to any of the allegations contained in the complaint.

Allegations

According to the complaint, at all relevant times, Moore was the CEO at both firms responsible for supervising the business activities of Boustead and Sutter, and he was also the Anti-Money Laundering Compliance Officer (AMLCO) for both firms. According to the complaint, from January 2021 through December 2023, Boustead and Sutter acted as the underwriter or selling group member in approximately 30 public distributions of securities, including initial public offerings involving small, micro, and nano-capitalization issuers based in China or other foreign jurisdictions. According to the complaint, in many of those offerings, issuers referred individuals to Boustead and Sutter to open brokerage accounts for the purpose of trading in the issuers’ securities; the referred individuals were often foreign nationals residing outside of the United States who never met or spoke in person with the firms’ representatives; and the complaint alleges that the firms’ business model posed risks that the brokerage accounts may be controlled by undisclosed persons or groups (i.e., nominee accounts) and that the trading in those accounts may be potentially manipulative or fraudulent.

According to the complaint, despite being aware of red flags relating to the firms’ underwriting and syndication activities involving customers and issuers in foreign jurisdictions, Moore failed to implement a reasonable AML program at either firm to monitor for, detect, and report suspicious transactions to achieve compliance with the Bank Secrecy Act and its implementing regulations. According to the complaint, the firms’ AML policies and procedures failed to identify red flag indicators that issuer-referred customer accounts may be nominee accounts, including similar timing of account opening, similar referral source or point of contact, repetition and commonalities in customer account profiles, and multiple customers or accounts placing layered buy limit orders at or around the same time at prices higher than the IPO price. According to the complaint, Moore, in his role as the firms’ AMLCO, was not aware of any particular AML risks associated with opening accounts for blocks of issuer-referred customers, notwithstanding FINRA guidance in Regulatory Notice 21-03, which identified multiple new customers opening accounts, particularly if they reside overseas and communicate with the firm only through electronic means or were introduced by the same individual, as a red flag of potential securities fraud.

According to the complaint, Boustead served as the underwriter for a Nasdaq uplisting of Focus Universal, Inc. (FCUV) in August 2021, which saw significant, suspicious aftermarket trading; FCUV referred more than 50 new customers to Boustead and Sutter, and the firms communicated with many such issuer-referred customers only by email; and at least fifteen FCUV issuer-referred customers raised red flags that their accounts may be nominee accounts, including financial information that was inconsistent with other available information about the customers, intent to effect high-value transactions not commensurate with the customers’ reported occupation, income, or financial resources, and unsubstantiated and unverified sources of funds. According to the complaint, on August 30, 2021, nine issuer-referred customers sent emails to the firms’ head trader to place laddered limit orders to purchase FCUV shares at escalating prices above the $5 listing price — with seven of those emails using virtually identical language — and altogether thirty-one issuer-referred customers placed orders with Boustead and Sutter to purchase 374,518 shares of FCUV at prices between $5 and $7.90 that day. According to the complaint, Moore received a copy of the spreadsheet tracking the FCUV issuer-referred customers’ limit orders to purchase FCUV at increasing prices above the $5 listing price, yet Boustead and Sutter failed to identify any of this order and trading activity as suspicious and never investigated whether the issuer-referred customers were engaged in pre-arranged or otherwise manipulative activity.

According to BrokerCheck, as of August 18, 2025, FINRA made a separate preliminary determination to recommend that disciplinary action be brought against Moore in FINRA Case #20210719879, alleging violations of FINRA Rules 3110 and 2010, in that Moore failed to reasonably supervise trading in the accounts of a senior customer and failed to detect or reasonably respond to red flags of excessive and unsuitable trading in those accounts.

It is important to note that, as of the time of this report, the complaint is still pending. No findings of wrongdoing have been made.

Background

Anti-money laundering requirements for broker-dealers are grounded in the Bank Secrecy Act and enforced through FINRA Rule 3310, which requires each member firm to develop and implement a written AML program reasonably designed to detect and cause the reporting of suspicious transactions. FINRA Rule 3310(f) further requires firms to include risk-based procedures for ongoing customer due diligence, including understanding the nature and purpose of customer relationships for the purpose of developing a customer risk profile and conducting ongoing monitoring to identify and report suspicious transactions. The rule requires that AML programs be tailored to each firm’s specific business activities, the types of accounts they maintain, and the customers they serve. A generic program is not sufficient when a firm’s business model creates specific, identifiable risks.

When broker-dealers serve as underwriters for small-cap initial public offerings involving issuers based in high-risk foreign jurisdictions, the risk that customer accounts may be opened by nominee investors — individuals who appear to invest independently but are actually acting under the control of an undisclosed third party — is a known and documented risk. Nominee accounts in this context may be used to create artificial demand for newly issued securities, inflate aftermarket prices, and facilitate manipulative trading patterns. FINRA published Regulatory Notice 21-03 in February 2021 and Regulatory Notice 22-25 in November 2022 specifically addressing these risks and the red flags associated with small-cap IPOs involving foreign-based issuers and issuer-referred customers.

FINRA Rule 3110 requires each member to establish and maintain a supervisory system reasonably designed to detect and prevent violations of securities laws and FINRA rules. Procedures that merely describe prohibitions without setting out mechanisms to detect violations do not satisfy the rule. FINRA Rule 2010 requires associated persons to observe high standards of commercial honor and just and equitable principles of trade. A violation of FINRA Rule 3310 or FINRA Rule 3110 is also a violation of FINRA Rule 2010.

FINRA Rule 12206 governs eligibility for arbitration claims. Investors considering a claim should consult with a securities arbitration attorney to evaluate whether their situation falls within the applicable timeframe.

Watch for These Red Flags

If you have or had a broker managing investments on your behalf, watch for these patterns:

• A firm that routinely opens accounts for groups of customers referred by the same issuer, particularly customers located overseas who communicate only by email, without investigating whether those customers may be acting as nominees or in coordination with the issuer
• Aftermarket trading patterns that show multiple accounts placing similar buy limit orders at escalating prices at or around the same time, particularly shortly after an IPO
• A broker-dealer that acts as both underwriter for an issuer and as account manager for investors referred to it by that same issuer, creating a direct conflict between its duties as a distribution participant and its obligation to conduct independent due diligence on customer accounts
• Recommendations to participate in small-cap IPOs involving issuers with primary operations in foreign jurisdictions, where you had little or no direct contact with the broker or firm before your account was opened
• Extreme share price volatility in the days immediately following an IPO, including substantial price spikes followed by rapid declines

If any of these patterns apply to your account, a free consultation with a securities law attorney can help you understand whether you have a potential claim for damages.

Steps to Take Right Now

1. Gather your account statements, trade confirmations, and any correspondence with your broker or firm, including emails, texts, and written materials about the investments.
2. Look up your broker on FINRA BrokerCheck at brokercheck.finra.org to review their full disclosure record.
3. Contact a securities arbitration attorney for a consultation to evaluate your options.

Rosenberger + Kawabata represents retail investors in FINRA arbitration proceedings involving unsuitable investment recommendations and supervisory failures by registered representatives and their member firms. Contact Rosenberger + Kawabata online for a free and confidential consultation, or call (310) 894-6921.

The information in this post comes from FINRA’s public records and BrokerCheck database. You can view the full detailed report (CRD# 5191450) here.

You can view the full March 2026 FINRA disciplinary actions report here.