FINRA’s Podcast Beyond Hollywood: Money Laundering in the Securities Industry
Note: This story originally appeared on FINRA. You may read it here.
Anybody remember the movie Office Space? That red stapler is iconic! When three employees inadvertently embezzle a bunch of cash in the movie, they decide the best way to cover it up is to launder it. But the thing is, they don’t even really know what money laundering is, and they learned that even the dictionary couldn’t fill them in.
If you want to understand what money laundering is and, more specifically, the efforts brokerage firms must take to prevent and detect it, tune in to FINRA Unscripted, episode 33.
The purpose of the AML rules is to help detect and report suspicious activity including the predicate offenses to money laundering and terrorist financing, such as securities fraud and market manipulation. Firms must comply with the Bank Secrecy Act and its implementing regulations (“Anti-Money Laundering rules”).
FINRA reviews a firm’s compliance with AML rules under FINRA Rule 3310, which sets forth minimum standards for a firm’s written AML compliance program. The basic tenets of an AML compliance program under FINRA 3310 include the following.
- The program has to be approved in writing by a senior manager.
- It must be reasonably designed to ensure the firm detects and reports suspicious activity.
- It must be reasonably designed to achieve compliance with the AML Rules, including, among others, having a risk-based customer identification program (CIP) that enables the firm to form a reasonable belief that it knows the true identity of its customers.
- It must be independently tested to ensure proper implementation of the program.
- Each FINRA member firm must submit contact information for its AML Compliance Officer through the FINRA Contact System (FCS).
- Ongoing training must be provided to appropriate personnel.
Looking for more information? FINRA provides AML Half-Day Seminars on the fundamentals of money laundering, money laundering typologies, relevant rules and regulations, and monitoring suspicious behavior. For the complete 2019 lineup, click here.
Still have questions? Give us a call today to schedule a free strategy session with our experienced team.
Author Bio
Leila Shaver is the Founder of My RIA Lawyer, a law firm that provides compliance and legal consulting for financial institutions. With extensive experience as a securities attorney and compliance expert, she has served as Chief Compliance Officer and General Counsel to RIAs, BDs, and TAMPs with billions in assets under management.
Leila understands the challenges RIAs face and is committed to helping RIAs streamline their processes, mitigate risks, and ensure compliance with regulatory requirements. She received her Juris Doctor from Atlanta’s John Marshall Law School and is a West Georgia Young Lawyers’ Association member. Leila has received numerous accolades for her work, including the Carroll County Bar Association’s Outstanding Young Lawyer Award in 2017.
