Examples of Suspicious Transactions - Anti-Money Laundering, Counter Terrorism Financing and Counter Proliferation Financing (2024)

Examples of suspicious transactions are listed below. The list is non exhaustive and only provides examples of ways in which money may be laundered through the capital market.

Unusual Transactions

1. Buying and selling of a security with no discernible purpose or in circ*mstances which appear unusual.
2. The intensity of transactions for an inactive trading account suddenly increases without plausible reason.
3. The entry of matching buys and sells in particular securities, creating an illusion of trading. Such trading does not result in a bona fide market position, and might provide ‘cover’ for a money launderer.
4. Unusually short period of holding securities.
5. Frequent selling of securities at significant losses.
6. Structuring transactions to evade substantial shareholding.
7. Simultaneous transfer of funds to a group of customers’ accounts from a third party
   [Updated 21/4/2014]
   

Large Cash Transactions

1. Larger or unusual settlements of securities transactions in cash form.
2. Opening of trading accounts with large cash sum (above RM 50,000).
3. The crediting of a customer’s margin account using cash and by means of numerous credit slips by a customer such that the amount of each deposit is not substantial, but the total of which is substantial.
4. Depositing large cash amounts in the reporting institution’s multiple bank accounts in the same day
   [Updated 21/4/2014]
   

Transactions Incompatible with Customer’s Financial Standing

1. A customer who suddenly starts making investments in large amounts when it is known to the Reporting Institution that the customer does not have the capacity to do so.
2. Transactions that cannot be matched with the investment and income levels of the customer.
3. Requests by customers for investment management services (either foreign currency or securities) where the source of the funds is unclear or not consistent with the customer’s apparent standing.
   

Irregular Account Movement

1. In a situation where multiple accounts are used to transfer funds between accounts by generating offsetting losses and profits in different accounts.
2. Abnormal settlement instructions including payment to apparently unconnected parties.
3. Non-resident account with very large movement with subsequent fund transfers to offshore financial centers.
4. A client who authorizes fund transfer from his account to another client’s account.
5. A client whose account indicates large or frequent wire transfer and sums are immediately withdrawn.
6. A client whose account shows active movement of funds with low level of trading transactions.
   

Suspicious Behaviour/Demeanour

1. A customer for whom verification of identity proves unusually difficult and who is reluctant to provide details.
2. A group of unconnected customers who share a common correspondence address.
3. A client who shows unusual concern for secrecy e.g. in the identify of beneficial owner of the account, his employment/business or assets or fails to indicate a legitimate source of funds.

Dealing with High Risk Jurisdictions

1. Investors based in countries where production of drugs or drug trafficking may be prevalent.
2. Funds credited into customer accounts from and to countries associated with
1. the production, processing or marketing of narcotics or other illegal drugs; or
2. other criminal conduct; or
3. wire transfer to or from a banking secrecy-haven country or country generally known for money laundering and terrorist financing.

Suspicious Behaviour/Demeanour by an Employees of the Reporting Institution

1. There may be circ*mstances where the money laundering may involve employees of Reporting Institution. Hence, if there is a change in the employees’ characteristics e.g. lavish lifestyles, unexpected increase in performance, etc. the Reporting Institution may want to monitor such situations.