EXCLUSIVE: Top FINRA anti-laundering official to depart for Vanguard

As the senior Bank Secrecy Act compliance official with Wall Street’s self-regulatory organization prepares to depart for the private sector, some industry experts are wondering who is capable of replacing her.

Sarah Green, senior director for enforcement and BSA policy with the Financial Industry Regulatory Authority, will take on a top financial crimes officer role with mutual fund giant Vanguard in the new year, Green confirmed in response to a query from Thomson Reuters Regulatory Intelligence.

Green, a former BSA enforcement specialist with the Securities and Exchange Commission, has played a significant role at FINRA, both in examination and enforcement matters as well as industry training, including via appearances at numerous conferences.

“She will be hard to replace. She knows the regulatory regime cold and she knows how the industry operates. You need both of those things to get it right,” Alma Angotti, managing director with Navigant said in an email response to Thomson Reuters Regulatory Intelligence.

A replacement for Green has not yet been named, a FINRA spokeswoman told Thomson Reuters Regulatory Intelligence.

Green also represents FINRA on the Bank Secrecy Act Advisory Group, a public-private sector body that advises the Financial Crimes Enforcement Network and the Treasury Department on anti-money laundering (AML) issues.

Under Green’s leadership FINRA has taken aggressive enforcement action against broker-dealers deemed to have failed to meet their AML obligations.

Although a few of those actions seemed “on the margins” and perhaps unnecessary, the vast majority seemed well-deserved, said a senior industry source who asked not to be named.
Vanguard did not respond to a request for comment on the hiring of Green.

FINRA also has vowed to issue a so-called regulatory notice clarifying brokerage firms’ compliance obligations resulting from the Treasury Department’s customer due diligence and beneficial ownership rule prior to the May 2018 implementation date. It is unclear what effect, if any, Green’s departure will have on the production of that notice, which would complement promised guidance from bank regulators.

Michael Rufino, who currently oversees FINRA’s sales practice program, also is widely renowned for his expertise in the BSA compliance space. It is unclear whether he will play any role in plugging any gaps – even temporarily — upon Green’s departure.

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