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Finra SIE Exam - Topic 3 Question 26 Discussion
Topic #: 3
Activities]
A registered representative (RR) opens a new account for a customer whose investment objectives are growth and income. She makes an initial deposit of $5,500 using a series of money orders drawn from different sources, and she makes no investments for the first 30 days the account is open. At the end of that time, the customer asks to have the funds wired to an account at a different firm as her needs have changed. The RR's first course of action should be to:
Step by Step
Suspicious Activity: The use of multiple money orders, lack of investment activity, and request to wire funds to another firm raise red flags for potential money laundering.
FINRA Rules: The RR should escalate the issue by reporting internally and potentially filing a Suspicious Activity Report (SAR).
Incorrect Options:
A: Denying the request without investigation may violate customer instructions.
B: Freezing the account requires a valid legal or regulatory basis.
D: Processing the request without investigation could facilitate illegal activity.
FINRA Anti-Money Laundering (AML) Guidance: FINRA AML Rules.
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