Financial institutions that fail to carefully check the qualifications of their anti-money laundering program auditors put themselves at risk of regulatory action. Auditors that don't have experience with Bank Secrecy Act rules and regulations can make costly oversights and errors that may lead to enforcement actions or painful demands from examiners down the road, said Erich Schumann, chief executive officer of Global Atlantic Partners, a compliance consulting firm in Boston. One financial institution Schumann worked with tapped the individual who audited its financial statements and operations to audit its AML/BSA program as well. The result? "Examiners went into the bank...
Deloitte Financial Advisory Services must pay New York $10 million and refrain from consulting additional state-regulated banks for one year after improperly sharing client data with Standard Chartered.
Small brokerage firms will no longer be exempted from undertaking annual independent testing of anti-money laundering programs following a rule change approved last week by the Securities and Exchange Commission.
Compliance officers at smaller financial institutions say that meeting the independent testing requirements of an AML program can be difficult. But current and former regulators say there are ways to keep the entire audit or portions of it in-house, a cost savings, if institutions are creative.