Gibraltar was first warned of its “deficiencies” in 2010 but its compliance failures persisted until the Office of the Comptroller of the Currency placed Gibraltar under a Consent Order in 2014, according to a statement from FinCEN, The Financial Crimes Enforcement Network. The OCC has also handed a $2.5 million penalty to the bank, it said.

As a result of the deficiencies, Gibraltar failed to timely file at least 120 suspicious activity reports involving nearly $558 million in transactions occurring between 2009 and 2013. The deficiencies also “unreasonably delayed” Gibraltar’s suspicious activity reporting regarding accounts related to a $1.2 billion Ponzi scheme led by Florida attorney Scott Rothstein, who was convicted in 2010 and sentenced to 50 years in federal prison.

“Gibraltar’s transaction monitoring system contained incomplete and inaccurate account opening information and customer risk profiles, which hindered its compliance staff from adequately spotting unusual account activity," FinCEN said. "Gibraltar also failed to sufficiently address an automated monitoring system that generated an unmanageable number of alerts, including large numbers of false positives, which caused significant delays in Gibraltar’s review. Gibraltar also failed to properly train its compliance staff, and failed to develop and implement an adequate customer identification program.”

Gibraltar Private Bank and Trust could not be reached for comment at the time of publication. The firm is not the first bank to be penalized for compliance failures linked to Rothstein, Reuters reported.

"In 2013, a unit of Canada's Toronto-Dominion Bank was fined $37.5 million by FinCEN and the OCC for failing to uncover and report in a timely manner suspicious activities in accounts belonging to the Florida law firm where Rothstein ran his fraud," the news service said.