According to Reuters, The Charles Schwab Corporation (SCHW) and Merrill Lynch brokerage, a unit of Bank of America Corp (NYSE:BAC) is under the U.S. regulators’ investigation over the violation of anti-money laundering laws. The regulators are scrutinizing whether the brokerage houses properly conducted identification of their clients as money laundering issues are on an upswing.
Previously, around 2 years ago, the U.S. Treasury Undersecretary for Terrorism and Financial Intelligence – David Cohen requested U.S. regulators to scrutinize financial institutions’ diligence in identifying their proper beneficial owners of accounts. Cohen’s concerns stemmed from increased secret transfer of funds by drug cartel members and terrorists.
The latest move by the U.S. Securities and Exchange Commission (SEC) follows the investigations over the brokerage industry under which brokerage houses are being scrutinized to ascertain whether they are abiding by anti-money laundering rules. However, if found guilty, fines or penalties to be charged has not been disclosed by the SEC.