Which of the following customer transactions with a securities dealer would indicate the highest suspicion of money laundering?

Question

Options

• AFrequent trades in unlisted securities throughout the day on a regular basis.
• BRecurring transfers of money into a brokerage account subsequently invested in short-term
• CAn unexplained high level of account activity with very low levels of securities transactions
• DInvestment in securities with a significantly lower risk than the customer's expressed risk

• A
  10% (3)
• B
  81% (25)
• C
  3% (1)
• D
  6% (2)

Explanation

The Financial Action Task Force (FATF) Recommendation that should cause an anti-money laundering specialist the most concern is B: Financial institutions should not keep anonymous accounts. This is because anonymous accounts are accounts that are opened or maintained without verifying the identity of the customer or the beneficial owner, or with fictitious or incomplete information. Anonymous accounts pose a high risk of money laundering and terrorist financing, as they can be used to conceal the origin, destination, and purpose of illicit funds, and to evade the detection and reporting of suspicious transactions. Therefore, the FATF Recommendation 10 requires financial institutions to identify and verify the identity of their customers and the beneficial owners, and to prohibit the opening or maintaining of anonymous accounts or accounts in obviously fictitious names.

No community discussion yet for this question.