Security services

A couple of years ago, the Financial Action Task Force (FATF) abandoned its annual “typologies report” in favour of ad hoc themed reports, writes Sue Grossey. I’d like to think that this was in protest at the tooth-zinging ugliness of the word “typologies”, but I suspect that rather it was to free up the FATF experts to write promptly about the issues of the day without being constrained to a yearly deadline. Their latest publication was perhaps inspired by the antics of Mr Madoff and others of his kind: it is entitled “Money Laundering and Terrorist Financing in the Securities Sector” [1], and was published in October 2009.

Susan Grossey may be contacted on tel: +44 (0)1223 563636; email: susan@thinkingaboutcrime.com

Compared with other FATF reports, this is a rather slim volume of only 86 pages. However, this should not detract from the size and importance of the sector in terms of money laundering risk. As the report says in its opening paragraphs, “the securities sector… can be used both to launder illicit funds obtained elsewhere, and to generate illicit funds within the industry itself through fraudulent activities.” It is also noted that, in contrast perhaps with the recently-examined casino and sports sectors,“the risks [in the securities sector] lie mainly not in respect of the placement stage of money laundering, but rather in the layering and integration stages.” Worryingly – given the size, complexity and global reach of the sector – “suspicious transaction reporting in the sector remains relatively low.”