WASHINGTON — The Securities and Exchange Commission today charged E*Trade Clearing LLC and E*Trade Securities LLC for failing to comply with an anti-money laundering rule that requires broker-dealers to verify the identities of their customers and document their procedures for doing so.

The SEC's order finds that from October 2003 to June 2005, E*Trade failed to accurately document certain customer identification program practices and verify the identities of more than 65,000 of its customers as required by the USA Patriot Act and SEC rules. E*Trade agreed to settle the SEC's enforcement action without admitting or denying the allegations, and will pay $1 million in financial penalties, according to the commission.

E*Trade's compliance failure was "systemic, resulting from lack of a cohesive organizational structure, lack of adequate management oversight, and miscommunications among personnel in several E*Trade business groups," SEC said.

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