Penny stock fraud and soon-to-be introduced customer due diligence regulations should be foremost on the minds of compliance officers at small securities firms, believes Kenneth Cherrier, senior vice president and chief supervisory officer at Overland, KS-based Waddell & Reed, Inc.
Narcotics traffickers are exploiting the sales of international securities traded in the U.S. market to better layer drug proceeds sent from the United States to Colombia, according to a federal official.
Federal examiners have asked at least a dozen banks along the U.S.-Mexico border to file suspicious activity reports even for relatively small transactions deemed only to be "unusual," say compliance professionals.
Mexico has lost as much $91 billion per year to capital flight associated with tax evasion and corruption during the last decade, according to a report by an American advocacy group.
Exemptions for Mexican hotels and other businesses from Mexico's limits on U.S. dollar deposits can be readily exploited by narco-traffickers and money launderers, say compliance professionals.
A broad anti-money laundering measure that would create and strengthen criminal penalties and impose reporting requirements on non-bank institutions in Mexico is likely to pass into law this month, say former government officials.
Concerns about drug cartel money smuggling could shape expected U.S. Treasury Department compliance rules on how companies should treat stored value cards, according to investigators.
Terrorists, once dependent on state sponsorship, are increasingly using front companies to invest in securities markets to finance their activities, according to U.S. government officials.
Roughly one-third of the 2,500 firms examined by the Securities and Exchange Commission failed to properly identify customers, report suspicious activity, or conduct tests for AML vulnerabilities. Nonetheless, brokers had fewer overall deficiencies in their AML programs in 2006 than last year.