US - The Managed Funds Association (MFA) has reiterated its support for the US government's anti-terrorist efforts, following reports alleging hedge fund links to terrorist organisations.
Washington-headquartered MFA - which represents professionals in the global alternative investment industry - said that the association backed the US Anti-Terrorism bill (USA Patriotic Act) as part of an effort to crack down on cases of money laundering.
John Gaine, president of the Association, said: Over the last eight weeks MFA has had an ongoing dialogue with the SEC, Treasury, CFTC and US Attorney's Office in New York. We have sent our members all regulatory notices on anti-terrorism and encouraged timely cooperation with the authorities.
The lack of regulation and transparency surrounding hedge funds could make them an easy target for money launderers. The FBI’s most recent round of investigations involved London-based global hedge fund investor EIM, headed by Arpad Busson, according to a report in The Wall Street Journal (WSJ).
The MFA will also be involved with the federal regulators in the anti-money laundering rulemaking process and is set to participate in this study.
It said: There are several provisions of the USA Patriot Act which impact financial institutions. For instance, all financial institutions should have formal, written ‘anti- money laundering programs’ as well as perform rigorous ‘customer account verification’ to make sure that our financial institutions are not unwittingly being used by terrorists for financial gain.
In particular, Section 356 of the USA Patriot Act mandates a study of investment companies - including hedge funds. MFA has already spoken with regulators about our role in this study.
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