Forbes reports that there are indications from Washington that hedge
funds, long exempt from anti-money laundering reporting rules, may soon be
brought into the fold under new rules proposed by the Treasury Department’s
Financial Crimes Enforcement Network (FinCEN).
1. While public hard data is scant on the amount of money
laundering through hedge funds, we believe that hedge funds would easily fit
into money laundering schemes. They offer varying degrees of: secrecy, offshore
accounts and the ability to place large sums of money. While it is often
thought that a “lock up” of the investment for long period would be a deterrent
to money laundering, this may no longer be the case with more complex schemes.
Perhaps most importantly, hedge funds have traditionally
delegated the anti-money laundering function to admistrators, who will do a
very good job performing as much checking and monitoring as required under
applicable law and their own internal procedures. However, the administrators may be at a
disadvantage in spotting the launderer because their personal contact with the
investor is cursory at best– and the personal contact element in the hedge
function scenario may be the most important…..
Read all about it at: http://www.forbes.com/sites/judygross/2013/04/26/hedge-funds-and-money-laundering/
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