2025 SEC Examination Priorities & FINRA Annual Regulatory Oversight Report
SEC stands for? and FINRA stands for?
Securites Exchange Commission
Financial Industry Regulatory Authority
Sets global standards for combating money laundering and terrorist financing, including detailed KYC recommendations for member countries.
FATF
What is the Basel Index?
An independent, data-based ranking and risk assessment tool for money laundering and related financial crime risks around the world AND/OR Provides risk scores for countries and jurisdictions based on data from 17 publicly available sources
What is the Dirty Dozen
12 most common tax scams and schemes reported by the IRS
Which three AML team members have birthdays in September
Dennis, Ian, and Karachel
Prior to the SEC, securities trading was governed by
Blue Sky Laws
Three (3) Best practices for KYC Compliance
EDD, Automation, Regular Reviews, Employee Training
Three (3) of the five (5) domains considered to contribute to a high money laundering risk
Quality of AML, CFT Framework, Corruption and Fraud Risks, Financial Transparency and Standards, Public Transparency and Accountability, Political and Legal Risk
Two (2) Dirty Dozen Scams include
Phishing and Smishing, Social Media Tax / Bad social Media Advice, Third-Party Online Account Scams, Fake Charities, False Fuel Tax Credit Claims, Improper Claims for Sick/Family Leave, Bogus-Self Employment Tax Credit, Improper Household Taxes, Overstated Withholding, Misleading Offers In Compromise Emails, Ghost Tax Return, New Client Spear Phishing Scams
He was a skater boy she said she ya later boy!
Yogi
Two (2) of the Six (6) divisions that make up the SEC are
Corporate Finance, Trading and Markets, Investment Management, Enforcement, Economic and Risk Analysis, Examinations
Three (3) red flags at account opening
Incomplete or Inconsistent Information, Reluctance to Provide Required Documents, Unclear Source of Funds/Wealth, Unusual Business Structure (Complex Ownership), Politically Exposed Persons (PEPs) with Unexplained Wealth, Connections to High-Risk Countries, Adverse Media Linked to Client and Affiliates
Two (2) types of corruption reviewed by the Corruption Perception Index
Bribery, Diversion of public funds, Access to information on public affairs/government activities, Laws ensuring that public officials must disclose their finances and potential conflicts of interest, Legal protection for people who report cases of bribery and corruption, Nepotistic appointments in the civil service, Ability of governments to contain corruption in the public sector
Name (2) risks to the client and the firm resulting from Phishing and Smishing Attacks
Account takeovers, Business Email Compromise (BEC), Unauthorized transfers, Onboarding of synthetic identities, Regulatory scrutiny, Reputational risk
If Tiana was going to get a soda it would be?
Dr. Pepper
Two (2) SEC 2025 Priorities include
Artificial Intelligence (examine RIAs and Broker Dealers use of AI as well as their policies and procedures on its controls), Cyber Security (practices, data loss prevention, and responses), Cryptocurrency (standards of conduct, risk disclosures, operational resiliency, and compliance with relevant laws)
Three (3) Red Flags in Account closing
Account closed immediately after a large transaction, Rapid movement of funds, Unexplained large withdrawals or transfers (especially to high-risk jurisdictions or unknown entities), Pushback on compliance inquiries when asked about transactions, Refusal to provide updated KYC documents before closure, Account closure request follows a KYC inquiry, Avoidance of questions about the reason for closure, Conflicting information provided by the client.
This domain has the largest impact on the risk assessment
Quality of AML/CFT/CPF Framework
What are (2) key red flags for Fake Charities
No online presence, Large or repeat donation, High Risk Jurisdiction
Imo's favorite food (or what gets ordered the most) is
Chipotle
According to FINRA Two (2) Emerging Risks regarding the use of Generative AI include
Investment club scams, New Account fraud and Account takeovers, Business Email Compromise, Ransomware Attacks, Imposter Scams, Market Manipulation
CAP is ...
Customer Acceptance Policy - Outlines criteria for accepting customers, including risk assessment based on occupation, geographic location, and source of funds.
How does Basel recommend managing risk?
Internal Controls, Policies/Procedures, Due Diligence, Periodic Reviews, training, Audits, Risk Assessments, Risk-Based Approach, AML/KYC Fields in profiles
What risk does Foreign Captive and Micro Captive Insurance pose to the Firm?
Payments to captive arrangements can be used to disguise transfers as insurance premiums, funnel money offshore, support foreign reinsurance layering schemes, or evade taxes.
Onboarding of bad actors through the misrepresentation of wealth and unclear beneficial ownership.
Four (4) honorable mentions to the AML Team - Little people or pets
Cookie, Bella, Tito, Max, Molly, William Milo (Bubba for short), Zoya