FINRA Issues Guidance on Anti-Money Laundering Compliance

Bao Nguyen, CAMS, CFE, CRCP | Featured in Wall Street Journal | May 24, 2019

A financial regulator for broker-dealers published new guidance on maintaining effective anti-money laundering (AML) controls.

The Financial Industry Regulatory Authority (FINRA) guidance outlines more than 90 red flags that brokerage firms should keep in mind to spot potential criminals. They include watching for customers who buy and sell securities without a clear purpose, or who transfer money in small amounts to evade reporting requirements.

FINRA’s notice expands guidance issued 17 years ago, following the overhaul of anti-money laundering laws after the Sept. 11 terrorist attacks. The update is part of a broader effort by the industry-funded regulator to be more transparent about its expectations, according to Bao Nguyen, a principal in the risk advisory practice at Kaufman Rossin.

It’s also likely meant as a warning to brokers. “They see a pattern of deficiencies,” Mr. Nguyen said. “They wanted to put other broker-dealers on notice.”

Bao Nguyen, CAMS, CFE, CRCP, is a Risk Advisory Services Principal – Investment Leader at Kaufman Rossin, one of the Top 100 CPA and advisory firms in the U.S.