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The U.S. Treasury Department lifted sanctions Thursday on over 300 individuals and companies linked to a now-defunct Colombian drug trafficking organization known for investing in legitimate businesses and reportedly captive banks.
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.
U.S. law enforcement officials and regulators have queried the nation's financial intelligence unit about securities settlements that use the world's top financial messaging platform, according to the agency's director.
Securities transactions are increasingly being used by South American drug traffickers to launder illicit proceeds, says Manny Muriel, an attaché in the Internal Revenue Service's (IRS) Bogota, Colombia office.
Some firms under the purview of the nation's largest independent securities regulator are failing to meet anti-money laundering compliance standards despite spending enough money to do so, according to an agency regulator.
Despite apparent money laundering risks in the securities sector, the number of related suspicious transaction reports filed by financial institutions remains "relatively low" worldwide, according an intergovernmental report released Monday.
Securities are becoming more attractive to money launderers because of the speed of transactions and the large number of high-dollar trades on exchanges with little oversight, a European anti-money laundering watchdog said Tuesday.
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.
