CSCP Anti-Money Laundering & Financial Crimes 3

Question 1

What is the primary purpose of the Financial Action Task Force (FATF)?

Accepted Answer

To set global standards and promote effective implementation of AML and counter-terrorism financing measures

Answer

FATF is an inter-governmental body that sets international standards and promotes policies to combat money laundering, terrorist financing, and related threats to the global financial system.

Question 2

Which of the following is considered a 'red flag' for potential securities fraud or market manipulation in an AML context?

Accepted Answer

Trading in thinly traded securities with sudden unexplained volume spikes followed by rapid liquidation

Answer

Sudden spikes in volume of thinly traded securities followed by rapid selling are classic indicators of pump-and-dump schemes, which constitute both market manipulation and potential money laundering.

Question 3

Under the BSA, what is the minimum dollar amount for a suspicious transaction that a broker-dealer must consider for SAR filing?

Accepted Answer

$5,000

Answer

For broker-dealers, SAR filing is required for suspicious transactions involving $5,000 or more, which is a lower threshold than the $10,000 CTR threshold.

Question 4

The term 'beneficial owner' in AML compliance most accurately refers to:

Accepted Answer

The natural person who ultimately owns or controls a customer account or legal entity

Answer

A beneficial owner is the natural person who ultimately owns or controls a legal entity, which must be identified under FinCEN's CDD rule to prevent the misuse of anonymous shell companies.

Question 5

When an AML investigation reveals that a SAR has been filed on a customer, which of the following actions is strictly prohibited?

Accepted Answer

Notifying the subject of the SAR that it was filed

Answer

SAR confidentiality provisions strictly prohibit tipping off the subject of a SAR filing; disclosure could compromise law enforcement investigations and exposes the firm to criminal liability.

(CSCP) Certified Securities Compliance Professional Practice Test

(CSCP) Certified Securities Compliance Professional Practice Test

CSCP Anti-Money Laundering & Financial Crimes 3