New York partner Kay Gordon was quoted in an On Wall Street article titled, “Money Laundering Among Regulators’ Top Priorities.”
Anti-money laundering policies were identified by both FINRA and the SEC as a top priority for examinations of broker-dealers in 2013. FINRA noted an increase in foreign currency conversion transactions and emphasized that there are no exemptions from the AML requirement for member firms.
This has a clear indication for advisors. By statute, some of the advisors are not required to have their own individual AML policies; however, all such advisers may still be subject to other AML requirements.
While advisors’ obligations under AML policies vary from firm to firm, much of the risk involved with money laundering sits at the front end, in the process of onboarding new clients. Advisors must adhere to the procedures in their firm’s customer identification program.
Kay commented, “clients who seem unconcerned about the returns on their investment account may also be cause for alarm. If an account owner never checks on how the account performs, does not care about the returns and is simply transferring money in and out of the account, that’s a potential red flag.”
Although there may be a red flag, it doesn’t necessarily mean that there is something wrong. It’s important to ask the next question with a measure of discretion. Ultimately, it’s up to compliance to determine how red that flag really is.
To read the entire article, click here.