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U.S. broker-dealers scrutinized for anti-laundering compliance in Venezuelan currency swaps

Nov 12 2012 Brett Wolf, Compliance Complete

Securities industry regulators are beginning to ask U.S. broker-dealers tough questions about how they are mitigating money laundering and sanctions risks associated with their involvement in a 2-year-old currency exchange system run by the Venezuelan government, sources familiar with the issue said. "There are a lot of questions being asked by regulators and compliance officers," said Sven Stumbauer, managing director of Veris Consulting Inc's Miami office. "And some broker-dealers, especially small introducing brokers, cannot answer them." "Now people are looking at it and saying 'Do we really understand the business and is there exposure for both money laundering and sanctions?'" Buying large sums of U.S. dollars in Venezuela is not simple due to strict currency restrictions. The complex system that many importers in the South American country rely on to meet their need for American currency poses money-laundering and sanctions risks for the U.S. broker-dealers that facilitate

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