In a statement, the regulator said it had leveled the fine collectively against E*Trade Securities and E*Trade Clearing after it found the firms had inadequate safeguards in place between January 1st 2003 and May 31st 2007.
Finra rules require brokerage companies to implement a series of anti-money laundering (AML) measures covering areas such as the monitoring of customer trading and the flow of money in and out of accounts.
Online brokerages like E*Trade are also obliged to consider the use of computerized transaction oversight in order to detect suspicious activity. Such cases have to be referred to the Treasury Department's Financial Crimes Enforcement Network.
E*Trade accepted the settlement without admitting or denying Finra's charges.
The watchdog's executive vice-president and chief of enforcement, Susan Merrill, said: "Brokerage firms' AML programs must be tailored to their business models"
E*Trade currently has around 4.8 million customer accounts.