Trillions of dollars flow through the securities industry each year. Securities firms are major global financial institutions. Moreover, as you know, securities firms face potential civil and criminal exposure when their firms are used to launder profits derived from illegal activities. The large monetary fines and forfeiture provisions that are part and parcel of the existing money laundering laws could seriously impact the financial stability of a securities firm, affecting all those who do business with that firm. We think that, as a matter of best practice, firms should protect themselves from being inadvertently drawn into charges of assisting money laundering.
Firms also have a long-term interest in preserving the integrity of our securities markets.
As securities regulators, we share that interest, and during the upcoming months, we plan to work with you in the industry to focus attention on combating money laundering. But, the SEC's interest in combating money laundering is certainly not a new one. The Bank Secrecy Act requirements have long applied to broker-dealers. Following those sweeps, and again in the early 1990s, the SEC brought a series of enforcement actions against securities firms and their employees for violations of the BSA's currency transaction reporting requirements. In addition, over the last decade, the SEC has actively participated in a variety of groups, both domestic and international, that promote anti-money laundering initiatives.