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July Newsletter

Taming the AML Monster
Dear Friends,

This month it was revealed that Bank of America had seen Mexican drug
lords use the bank to hide money in its accounts and invest illegal
proceeds. Then, if that revelation was not startling enough, [1]a
Senate subcommittee issued a remarkable report on the AML and OFAC
deficiencies at HSBC.
Links:
1. http://www.levin.senate.gov/newsroom/press/release/hsbc-exposed-us-financial-system-to-money-laundering-drug-terrorist-financing-risks

That global bank was cited for numerous lapses that included a 3-year
failure to do any AML monitoring on $15 billion in bulk cash
transactions; more than 28,000 undisclosed, OFAC sensitive transactions
involving $19.7 billion; and a backlog of 17,000 unreviewed suspicious
activity alerts.

Because the Senate subcommittee’s report chastises the Office of the
Comptroller of the Currency for allowing these problems to “fester,” it
is hard to imagine an outcome from the hearings that does not include a
massive new focus on AML and OFAC monitoring across the global banking
landscape.

That new scrutiny will significantly add to the cost of compliance and
increase the likelihood a financial institution will have its growth
frozen by a red flag or its continuing operations hampered in the
effort to comply with AML and OFAC monitoring regulations.

Fast, Effective AML/OFAC Monitoring

Now might be a good time for me to remind you that K2 Intelligence has
developed a suite of AML/OFAC services that will allow financial
institutions to deal with alerts and compliance needs with greater
speed and cost-efficiency than what is currently in use today.

At the center of our AML/OFAC capabilities is our proprietary K2
Analytics program which will allow banks and other financial clearing
houses to isolate, track and investigate transactions in the most
effective manner.

The Problems at HSBC

Contrast this with what [2]Reuters recently revealed about HSBC’s
AML/OFAC programs:
Links:
2. http://in.reuters.com/article/2012/07/13/hsbc-compliance-delaware-special-report-idINDEE86C0I420120713

“Former employees in the New Castle office describe a febrile
boiler-room environment overseen by managers uninterested in
investigating transactions with possible links to drug trafficking,
terrorist financing, Iran and other countries under U.S. sanctions, and
other illegal activities. Instead, they say, the single-minded focus
was on clearing out the paperwork as fast as possible.”

AML/OFAC compliance should not be an exercise in clearing paperwork.
Our AML/OFAC solutions are designed to swiftly discern and address real
concerns without creating a backlog of make-work.

Join Us for Breakfast

On Tuesday, July 31st, [3]we will be presenting our AML/OFAC services
at a breakfast in our offices. More important, we are most interested
in hearing about your needs and concerns, especially in light of this
extraordinary spate of news. So [4]please register here for the event
or[5] feel free to get in touch directly.
Links:
3. http://www.eventbrite.com/event/3748495852
4. http://www.eventbrite.com/event/3748495852
5. mailto:marketing@k2Intelligence.com?subject=AML%20Breakfast

Yours,


Jeremy M. Kroll

K2 Intelligence, LLC

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