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37 Cases of Swindling Under Investigation in Securities Sector
A recent report by the Anti-Money Laundering Council (AMLC) and other partner agencies has highlighted 37 cases of swindling under investigation in the securities sector, representing around 25% of the total cases under investigation.
The Threat of Cyber-Enabled Fraud
The competent authorities and covered persons engaged in this risk assessment perceived cyber-enabled fraud as a serious issue. The threat of cyber-enabled fraud has been assessed to be increasing in both volume and sophistication, with the use of the internet facilitating transactions and allowing scam operators to reach a wide market.
Swindling Cases: A Major Concern
According to the report, swindling cases account for 25% of the total cases under investigation in the securities sector, making it one of the most significant concerns. The majority of these cases involve individual investors who are duped into investing in fake schemes or Ponzi schemes.
Other Offenses Under Investigation
Other offenses highlighted as under investigation in the data from AMLC, SEC, and other partner agencies include:
- Child pornography
- Environment crimes
- Hijacking
- Human trafficking
- Kidnapping for ransom
- Qualified theft
- Robbery and extortion
- Smuggling
- Violation of e-commerce Act
- Violation of intellectual property rights
- Violation of penal laws of other countries
Tax Evasion: A Major Money Laundering Threat
The report also highlights that the threat posed by tax evasion is high, posing a major money laundering (ML) threat to the securities sector. This is particularly concerning given the current and potential threats facing this sector from plunder and corruption-related offenses.
Crime Threat Assessment per Sub-Sector
In terms of crime threat assessment per sub-sector, the report rates:
- Brokers/dealers as medium-risk
- Investment houses/underwriters of securities as medium-to-high risk
- Government securities eligible dealers as low-risk
- Investment company advisers/mutual fund distributors/investment companies as medium-low risk
Overall Crime Threat Assessment
The overall crime threat assessment for the securities sector is rated as medium. In terms of vulnerability to ML/TF, the report assesses that there is a medium level of vulnerability in the sector.
Conclusion
The recent report by AMLC and other partner agencies highlights the significant risks facing the securities sector, including swindling and other financial crimes. The report underscores the need for stronger anti-money laundering and combating the financing of terrorism (AML/CFT) systems and controls to mitigate these risks and protect investors.