Regulatory Issues and Ethics Flashcards
What is the dollar amount that reqs reporting for the bank secrecy act
10k
What type of payment is the Bank secrecy act about
currency only
When must a Currency Transaction report be filed
within 15 days
What is the USA PATRIOT ACT
must report suspicious activity called SARs
What are the rules for the patriot act
5k transaction one time or aggregate or 3k for wire transfers
OR
funds from illegal activities
signs of trying to evade the CTRs
transaction doesn’t appear to have a business or lawful purpose
requesting the firm to conduct illegal activities on their behalf
When do SARs need to be reported
30 days
Is a filing of a SAR a secret to the person its about
yes, even if subpoenaed
What are requirements for the reporting a wire transfer SAR
held for 5 years
name of sender and recipient
amount transfered
recipients institution
What are the red flags that need to be reported to the AML officer
no concerns with risk/costs
frequent or larger deposits of cash
excessive journal entrees in unrelated accounts
Layering
Who controls the SDN
Office of Foreign Assets Controls
What are the OPAC rules for new clients
we get their ID info
check SDN list before starting relationship
Should you periodically check the SDN list for your existing clients
yes
What are some ways/signs of market manipulation and insider trading
market rumors
pump and dumps
front running
excessive trading
marking the open or close
freeriding
matching orders
What are pump and dumps
using or adding to market rumors to later dump shares on the open market
What is front running and give example
knowingly purchasing something before someone else purchases it to get the gains
RR receives order from a mut fund to purchase large volume of a stock, goes to his personal account to purchase some before
What is excessive trading
also called churning
excessive trading or excessive size trades to gen commish
What is a req for monitoring excessive trading
principals need to monitor, especially dis auth acc
What is marking the open or close
markign the open - entering orders or falsly reporting fake orders before the open to influence the opening price
marking the close - same
What is freeriding
buying and selling all before the payment is made
What is the pen for freeriding
90 day freeze
and cant resume until cash or marginable secs are in acc bef trans
What is matching orders
one party sells to another party with intention to repurchase at pretty much the same price
this make the stocks transaction volume look larger than it is
Another name for matchign orders
painting the tape
Definition of insider trading
material info that isnt available to the public
What are the questions, when answered yes, indicate insider trading
Is the info material and nonpub
does the tipper owe a fid resp to a comp or stock holder and has he breached it
does the tipper meet the personal benefits test
Does the tippee know or should the tippee have known the info was inside
what are the pens for insider trading
tippee- up to 3 times gains or losses avoided
RR or BD- up to 1 mil or 3 times gain or loss avoided whichever is greater
Employee of a BD - upto 3 times damages or 25 mil which ever is greater
All - criminal charges of 5 mil and 20yrs in jail
What are comteporaneous traders
people entering trades on the opposite side of the market as the inside trader at the time they were tradin g
What can comtemp traders do
sue the insider up to 5 years after the event
What does bona fide mean
sincere, real
