Its former money laundering reporting officer, Sudipto Chattopadhyay, has also been fined £14,000.
The FSA says regulated firms should carry out assessments of the money laundering and financial crime risks that they are exposed to.
But between September 2006 and November 2008, Alpari failed to carry out thorough assessments and, as a result, put the firm at risk of being used for financial crime.
Alpari failed to carry out satisfactory customer due diligence procedures at the account opening stage and failed to monitor accounts adequately.
The regulator says these failings were particularly serious as Alpari’s customer base included those from higher risk jurisdictions, such as Nigeria, and its customer relationships did not operate on a face-to-face basis.
Alpari also failed to have in place adequate systems for screening customers against UK and global sanctions lists and for determining whether customers were politically exposed persons.
Despite increasing its customer base from 400 to 11,500 live accounts between mid 2007 and mid 2008, Alpari did not expand its compliance and anti-money laundering function in line with the rest of the business and placed too much responsibility on Chattopadhyay.
As its money laundering reporting officer during this period, with responsibility for compliance oversight and money laundering reporting, Chattopadhyay was accountable for these breaches and therefore also received a financial penalty for the failings.
Chattopadhyay has also given an undertaking that he will not make an application to the FSA to be approved for a compliance oversight or MLRO role for three years.
FSA director of enforcement Margaret Cole says: “The FSA expects firms to assess the financial crime risks to which they are exposed properly. The FSA also expects expanding businesses to commit sufficient resource to their compliance and anti-money laundering functions. Alpari failed to operate and maintain adequate money laundering systems and controls, leaving it open to the risk of financial crime.
“These penalties serve as a reminder of the importance of maintaining effective anti-money laundering controls – something we have repeatedly stressed. All firms should ensure that they minimise the risk of exposure to financial crime and we will continue to be extremely vigilant in this area.”
Both Alpari and Chattopadhyay cooperated fully with the FSA investigation and agreed to settle at an early stage, qualifying them to a 30 per cent discount.
Without the discount, the financial penalties would have been £200,000 for Alpari and £20,000 for Chattopadhyay.
The FSA also recognised that Alpari and Chattopadhyay had put in place a remedial action plan to address the failings.