A new customer has just been onboarded in a securities firm. After a few weeks, there are unusual trading patterns that are being flagged. Which pattern is most concerning to the compliance officer?

The correct answer is D. The customer accumulates securities of a low volume counter in small increments on a weekly. The most concerning trading pattern for a compliance officer when a new customer has been onboarded in a securities firm is the customer accumulating securities of a low volume counter in small increments on a weekly basis. This type of behavior could indicate that the customer…

Risks and Methods of Money Laundering and Terrorist Financing

Question

Options

AThe customer engages in large trading in securities that are liquid or highly priced from the
BThe customer's repeated trading in securities that are low priced and low volume counters.
CThe customer receives many incoming wire transfers from related parties to the trading account.
DThe customer accumulates securities of a low volume counter in small increments on a weekly

How the community answered

(39 responses)

A
5% (2)
B
3% (1)
C
10% (4)
D
82% (32)

Explanation

The most concerning trading pattern for a compliance officer when a new customer has been onboarded in a securities firm is the customer accumulating securities of a low volume counter in small increments on a weekly basis. This type of behavior could indicate that the customer is attempting to obscure their identity or the true purpose of their trading activity, which can be indicative of money laundering or other suspicious activity.

Topics

#securities trading red flags#market manipulation#low-volume counters#layering

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