The Blog Of The Securities Industry Professional Association

Anti Money Laundering Follies

crime scene

Is it time to stop the charade? 

The recent horrific attacks in my hometown of Orlando served as a reminder of how vulnerable we really are.  Whether it’s flying on a plane, going to a theme park or taking mass transit, we are all vulnerable to Islamic terrorist attacks.  Sure, there are things we can do and ways we can avoid certain tragedies but the events in Orlando and even Boston two years ago show us that where there is an evil wil,l there is a way.  I was told once by a security worker friend of mine that the massive security we see at airports is nothing more than an effort to keep us all from panicking and to keep us flying across the world.  The events in Orlando were a grim reminder of terror suspects being discovered, only to have them slip through our fingers.  The FBI was alerted of this man’s unusual behavior and rantings on two separate occasions.  The FBI interviewed him 3 different times but finally concluded that it was not worth the follow up nor worth tracking his every movement.  In many ways, this is the problem with the SEC/FINRA AML policy.  The policy was enacted by the federal government and is largely enforced by FINRA against brokerage firms for not filing Suspicious Activity Reports” (SAR’s) on a timely basis or for allowing stock certificates to be deposited and sold.

In light of the carnage caused by an Orlando terrorist, isn’t it time that  we take a quick break from reality and reassess the idea of brokerage firms spending time and money doing all these reports?  I have several clients who not only follwed the SAR protocol and made the proper notifications, but they also followed up to see what the status was.  In all cases they were told that the case cannot be discussed, yet a few months later a major fraud occurred that could have been avoided had they( FINRA and SEC) taken the information and acted on it.  I have personally notified the SEC and FINRA of a possible ponzi scheme that I was being solicited to partake in.  My first clue was the use of the word “Guaranteed” return.  The second clue was that they promised investors that if you invested $10,000 you could expect a return of 8% but if you invested $100,000 your return would be 10%.  Whether you buy 1 share of apple or 1000 shares your rate of return will be the same.  I sent dozens of emails to the whistle blower of both organizations and actually received a call from FINRA telling me not to send them these emails anymore.  Fast forward three years and both FINRA and the State of Louisiana are calling me because the SEC FINALLY acted on my tip from 2011.  It took a full two years before they acted on my constant tips that a ponzi fraud was taking place click here to view SEC  litigation release.  I was perplexed why it took so long for one of these agencies to react to such outlandish behavior and as I consider the FBI’s action in the Orlando terror case, its only normal to question exactly what is happening with all the SAR’s being filed by small firms.  Are we to believe that FINRA is working hand and hand with our government to really track down the bad guys or is this law nothing more than a way to fine small firms $10,000 or more for not reporting suspicious activity that will not be followed up on anyway??  I am of the opinion that the FINRA AML policy is nothing more than a ‘Gotcha” game in which they come in and decide that a person depositing 500,000 shares of a three cent stock qualifies as suspicious and thus you are in violation and will be fined for not reporting it.  Its time they take a realistic look at where the most money is laundered for illegal activity instead of hammering small firms every single month with fines for not reporting that their client of 20 years deposited a pink sheet stock.  The world has changed and continues to change.  We believe a full overhaul of all stock rules should be discussed and that AML for brokerage firms should be abolished.  In the ten plus years since its inception, can anyone recall a time when FINRA the SEC and FBI stood outside on a court house step and took credit for breaking up a Mob or Al Qaeda threat due to the AML reporting?

crime scene  What’s your view?  As always we would love to hear your opinions.  Do you really believe your SARs reports are being followed up on in a timely way so as to protect our country?

Post Metadata

June 15th, 2016




  1. Ryan Manning

    Hell No!!! its nothing but a big joke so they can fine us anytime they want!