Hedge Funds Operate Free of AML Programs Five Years After Rules Proposed

By Matt Squire

More than five years after regulators proposed that hedge funds be subjected to anti-money laundering standards, compliance experts in Washington, D.C., say the initiative will continue to gather dust as regulators shift their priorities toward the capital crisis and other regulatory issues. The U.S. Treasury Department's Financial Crimes Enforcement Network (FinCEN) in September 2002 proposed a requirement that unregistered investment companies, including hedge funds, maintain anti-money laundering programs. The move was mandated by the Patriot Act, passed in 2001. But with FinCEN focusing on other initiatives, no action is likely until a case of money laundering surfaces in the hedge...