Anti Money Laundering

# Anti-Money Laundering (AML) > Exam weight context (sourced from FINRA 2025 Series 7 outline): AML compliance falls within Function 2 (Evaluate Accounts and Customer Information), which accounts for 9% / 11 of the 125 scored questions. Key rules directly cited in the 2025 outline: FINRA Rule 3310 (Anti-Money Laundering Compliance Program); USA PATRIOT Act (Sections 314, 326, 352); Bank Secrecy Act. Every threshold — $10,000 CTR, $5,000 SAR — is testable as a hard number. --- ## What Is Money Laundering? Money laundering is the process of making illegally obtained money appear to come from a legitimate source. The three classic stages: 1. Placement: Introducing illegal cash into the financial system (e.g., depositing drug proceeds into a bank) 2. Layering: Obscuring the trail through complex transactions (wire transfers, currency exchanges, shell companies) 3. Integration: The money re-enters the economy appearing legitimate (buying real estate, luxury goods, or investments) Securities firms are attractive for money laundering because they can facilitate rapid movement of large sums and create complex transaction trails. The financial services industry is therefore subject to extensive AML regulations. --- ## The Bank Secrecy Act (BSA) The Bank Secrecy Act (1970) is the foundational U.S. AML law. It requires financial institutions to: - Maintain records of cash transactions and certain other transfers - File reports with the government to assist in detecting, investigating, and prosecuting money laundering - Cooperate with law enforcement The BSA is administered by FinCEN (Financial Crimes Enforcement Network), a bureau of the U.S. Treasury. --- ## AML Program Requirements (FINRA Rule 3310 + USA PATRIOT Act…