Posted by & filed under Research & Investigation.

When conducting KYC for higher risk client types, it is not uncommon for a bank’s AML policy to require an in-person meeting or on-site visit.

While not every client will require this level of due diligence, visiting a company’s website is a common task that takes place at several stages in the AML process from onboarding through transaction monitoring.

Below is a list of tools that can help in evaluating a company’s website past its marketing copy.

Whois Lookup

whois

A Whois search can provide information on a domain name; including information on ownership, date and place registered, expiration date, and the name servers assigned to the domain.

Knowing this information can be helpful in identifying or confirming individuals affiliated with the company, or finding potential discrepancies with company information.  For example, a company may claim to have been in business for 10 years, but only registered their company website a week ago.  There may be several valid reasons why this occurred, but knowing this information will allow an investigator to ask informed questions.

It is important to also note that domains can be registered privately, so ownership information will not always be provided.

Internet Archives: Wayback Machine

wayback_machine

The Wayback Machine is a digital archive of the World Wide Web and other information on the Internet created by the Internet Archive.  The site allows users to search for past indexed versions of a website.  It is an extremely useful tool if a webpage has been taken down, or if you want to compare information currently on a webpage to what was previous listed; such as to identify company executives that may have been removed.

Reverse Image Search

tin-eyeIt is common for websites to use stock images that can be found across many other sites, but re-used website images can also be an indicator of something more going on beneath the surface.

A reverse image search allows you to upload or paste the link to an image URL and search for websites that contain the same or similar images.  This could potentially uncover if a website is an exact copy of another website, if executive identities are accurate, or to verify any image of something that should be unique to the company.

 

The above all can be valuable tools in gaining additional insight into a company’s website, but it is important to also take into consideration on-page factors, such as spelling,  grammar, and the over look and feel of the site.

 

UPDATE:  Check out part 2 of this blog post here

Posted by & filed under AML Presentations, Research & Investigation.

AML investigations can often be complicated, and there are a whole host of advanced software tools available to help AML investigators visualize transactions and relationships.

Structuring Example

While these products can be beneficial, there is a tool that virtually all AML investigators have access to everyday that can greatly aid in detailing complex relationships, PowerPoint.

Attached are six free PowerPoint templates that the TransparINT team has developed for common AML investigation scenarios.  The templates can be used as part of AML presentations or as visualization tools to help map out complex relationships.

The attached file includes six slides containing the following:

  • Structuring Example
  • Rapid Movement of Funds Example
  • Funnel Account Example
  • Wire Activity Example
  • Transaction Flow Example
  • Ownership Structure Example

Feel free to use these templates in whole or as building blocks to fit your specific need.  Also included on the final slide are notes on some of the tools used to put these templates together.

Click here to download the AML presentation templates

Ownership Chart Example

Posted by & filed under Negative News, Research & Investigation.

TransparINT_White_paperKnowing Your Customer (KYC) is, “the cornerstone of a strong BSA/AML compliance program.” The purpose of KYC is to identify customers, counterparties, beneficial owners and others doing business with a financial institution who pose greater money laundering, financial crime, or terrorist financing risk.

Identifying what is known as “negative news” is an essential way to determine who among this group poses risk. Negative news, also known as “adverse media” is discovered by searching the public information domain, where news items, publications, and other print or electronic records exist. Negative news research is an indoctrinated core of KYC compliance.

Anti-Money Laundering (AML) and financial crime compliance professionals rely on just a handful of applications to discover the misdeeds of those they are researching. Nearly every financial institution uses these applications, or tools, and has done so for the past decade. The tools include risk intelligence databases, archived news libraries, and internet search engines such as Google. Many believe these tools are an effective way to discover past risky activity. Most in the industry accept that if there is a record of wrongdoing to be found, it will be found by using these applications.  That belief is wrong.

Applications financial institutions use to discover negative news fail to identify significant amounts of publicly available risk information. This poses substantial compliance, operational, legal and reputation risks.

This paper addresses how current industry practices for complying with the second element, KYC regulations, fall well short of fulfilling regulatory requirements and how TransparINT enables institutions to fully comply with AML laws, properly identify risk, and protect themselves and their employees from penalties.

Click here to download the full paper!

Posted by & filed under Company.

David_CarusoWe are very happy to announce that David Caruso has joined TransparINT as Chief Operating Officer.

David comes with almost 20 years of industry experience, and has been at the forefront of the toughest issues in anti-money laundering compliance.  David’s prior positions include roles as Chief Compliance Officer of Riggs Bank and CEO of Dominion Advisory Group.

David joins TransparINT as Chief Operating Officer to continue TransparINT’s recent success providing compliance tools to financial institutions in the United States and internationally.

We could not be more excited to welcome David to the TransparINT team.  Throughout his extensive career, David has seen and thrived in just about every aspect of the AML industry.  TransparINT is dedicated to providing truly innovative tools that actually work for modern day compliance officers and analysts, and David will play a key role in forwarding this mission.

Read full press release here

Posted by & filed under AML Presentations.

Recently the TransparINT team had the opportunity to give a presentation to AML groups at Standard Chartered Bank on the heightened risks involving shell companies.

To highlight this complex topic, we used a case study involving well know nominee director Erik Vanagels to provide a real-world example on how to investigate these high risk entities.  Please find the full presentation below.  Enjoy!

Posted by & filed under Negative News, Research & Investigation.

We’ve developed the TransparINT Platform to be the most comprehensive tool for quickly and systematically identifying adverse media and negative news.

BuStop_Signt we know that many departments still rely on search engines, such as Google, as the main tool to identify negative information.  While there are several reasons why this is not the best method, the below examples are absolute errors that should not be part of an effective negative news search string.

 

1. Depreciated Operators

Based on a number of reasons, Google has depreciated the functionality of several search operators that are commonly used in negative news search strings.

The biggest update has come from the depreciation of the Boolean + operator.  Based on Google’s advanced operator page, the addition of a plus sign to a search term now either prompts the lookup of Google+ pages or a blood type.

Another depreciated, but commonly used connector by AML investigators, is the tilde (~) character, which when appended to the front of a word prompted Google to include synonyms for the search term.

Any negative news search string utilizing these connectors is no longer technically valid.

– For more information on the depreciated plus sign (+) functionality click here
– For more information on the the depreciated tilde (~) operator click here

 

2. Lower Case “OR” Connectors

The “OR” operator is an essential element of any good negative news search string, and is used to chain together lists of derogatory key words that may have a connection with your search focus’ name.  To use this operator correctly, it MUST be capitalized.  This is an extremely common mistake, and a lower case “OR” will not correctly be interpreted as the Boolean operator intended.

 

3. Too Many Words

While stuffing as many negative key terms in a search string may seem like a good way to ensure that all available negative information will be uncovered,  Google only recognizes the first 32 words in a query.

All words after 32 will be ignored, and Google will provide you with the below message.

google-word-limit

 

4. The “AND” Operator is Unnecessary

Google automatically appends the “AND” operator between search terms, so there is no need to include it in a search string.  While adding an “AND” won’t make your search string invalid, it does add a small amount of additional time and expands the complexity of your search sting, increasing the possibly of typos.

 

The above rules only apply to Google, and every different search engine follows slightly different rules.  While Google can be a useful tool, compliance officers shouldn’t have to worry about correctly crafting complex search strings, or keeping up to date on Google”s search policy changes to find the information they need.

If you are interested in seeing a better way to search for negative news, contact us here to set up a live demo of the TransparINT platform.

Posted by & filed under Beneficial Ownership, Research & Investigation.

Five open source methods to help you track down ultimate beneficial owners (UBOs).UBO Chart

There has been a lot of attention on FinCEN’s proposed customer due diligence requirements for financial institutions to identify beneficial owners of legal entity customers.  Even though these rules are greatly needed, anyone who has ever been tasked with this responsibility knows just how complex it can be to identify UBO information.

Unfortunately today, there is no central database where this information exists, and most governments do not even require the information to be captured when a company is registered.

Despite that, UBO information can many times be identified through public sources.  Below are some of the best ways to help identify company owners.

 

1. Company Website

The public source starting point for any company research should be the company’s own website.  While this is obviously a biased source, it can identify key senior management who many times also turn out to be company owners.  It can also identify if the company is a subsidiary of another company.

For publicly traded companies, look for the “Investor Relations” section of the site for ownership.  If not specifically highlighted, the company’s most recent annual report and/or audited financials may contain this information.  Remember, just because a company is publicly traded, it doesn’t mean that there aren’t individual shareholders with a significant portion of the company.

Bonus tip: Make sure to look at the company’s copyright footer at the bottom of the site’s web page.  This can be useful in identifying the company’s full legal name for future research, and many times can identity a parent company if the company is a subsidiary.

 

2. Corporate Registries
corpsearch.net

Corporate registries maintain incorporation filings and records for legal entities.  For non-publicly traded companies, they are the best way to help track down ownership.

The challenge arises in that they are location specific and every country/state has different laws on what information needs to be obtained at the time of incorporation.  Also, not all registries provide direct or full access to their information.

To save you the time of trying to find every different international corporate registry or Secretary of State website, below are some links to corporate registry directories and searches.

Bonus source: ICIJ’s Offshore Database

 

3. EDGAR For Publicly Traded Companies and their Subsidiaries

The EDGAR (Electronic Data Gathering, Analysis, and Retrieval) database maintains a searchable index of filings by companies who are required by law to report with the Securities and Exchange Commission.

The volume of different types of filings contained in the EDGAR database can get overwhelming quickly if you are not sure where to look.

Every corporation listed on a U.S. stock exchange is required to file annual reports with the SEC, called a 10-K form.  The “Exhibit 21” of the 10-k provides a list of subsidiary companies along with the place of incorporation for each subsidiary.

In addition to the 10-k, Forms 3, 4, and 5 can be used to identify corporate insiders, which are company officers, directors, or any beneficial owner owning more than 10% of its stock.

 

4. Form ADV  (for investment advisers only)
Form ADV Search

The Form ADV is used by investment advisers to register with both the Securities and Exchange Commission and state securities authorities.  The form consists of two parts, and part one requires information about the investment adviser’s ownership, in addition to information about its clients, employees, business practices, affiliations, and any disciplinary events of the adviser or its employees.

To perform an investment adviser search, visit the  Investment Adviser Public Disclosure website and enter the firm’s name.  Information on the firm’s direct and indirect ownership is contained under Schedule A and Schedule B on the bottom left menu sidebar.

 

5. Search Engines

The indexed public web now contains over 30 trillion web pages (that’s right, 30,000,000,000,000).  There is a very good chance that information on a company’s ownership is identified somewhere out there.  To avoid being overloaded with a flood of non-relevant results, I suggest targeting your search query similar to the below, which will work in all major search engines.

"Company Name" owner OR shareholder

 

There is no one-stop-shop for UBO information, but the above are some of the best public resources available to researchers today.  In future posts, I plan on breaking down some of the other more practical challenges facing KYC officers complying with UBO regulations.

Posted by & filed under Company.

Over the last two years we have been dedicated to providing AML and financial crime compliance tools to address the needs of modern compliance officers.

We will be continuing with that goal by using this blog to communicate company and product updates, as well as commentary on new developments in our industry.

Stay tuned for our next update!