Most firms can't confidently say they’ve never accepted capital from a sanctioned investor, and that’s a problem given new AML regulations for investment advisors. In this episode of AML Uncovered, Mark is joined by Passthrough's Tim Flannery and Justis Midura as they break down where data points to private market firms being vulnerable given, why 'I don’t know' won’t cut it anymore, and how private market firms can protect their franchise ahead of regulatory enforcement.
Topics covered include:
[08:12] Discussion on the evolving regulatory landscape with new SEC rules requiring AML and counter-terrorist financing programs for private equity firms and other investment advisors by January 1, 2026.
[13:47] Tim delves into the risks and challenges fund managers face if they cannot confidently confirm the absence of sanctioned individuals in their funds, emphasizing the potential impact on fundraising.
[22:45] Justis presents key statistics from Passthrough's data, revealing the statistic probability of encountering sanctioned individuals within investor bases and the complexity of managing beneficial ownership information for compliance.
[35:10] The conversation shifts to the operational challenges in implementing AML and KYC programs, with a focus on the importance of technology in streamlining these processes.
[45:30] The group discusses the reputational risks and financial penalties associated with failing to comply with AML regulations, and the importance of a robust compliance program.
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