Alpine Securities Corp., a penny-stock broker, wants the U.S. Supreme Court to weigh in on its tussle with the Securities and Exchange Commission about the agency’s power to enforce anti-money laundering reporting requirements. The SEC filed its opposition to Alpine’s petition for certiorari on Oct. 4. (Editor’s Note: The Supreme Court denied cert. in this case late Nov. 8)
Despite the case’s relative mundanity, the issue has surprising implications for Wall Street whistleblowers.
Some regulatory context is necessary to understand the case’s potential downstream effects.
The Bank Secrecy Act (BSA) is the U.S.’s primary anti-money laundering law. In its current form, the BSA and Treasury’s associated anti-money laundering (AML) regulations require broker-dealers to keep records and file suspicious activity reports (SARs) in qualifying circumstances. Violations can result in steep financial penalties and even prison sentences.
In addition, under Rule 17a-8, broker-dealer non-compliance with BSA/AML reporting requirements may serve as a predicate for...
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