Fellow TF blogger Rachel Ehrenfeld, her colleague John Wood (who looks likely to be joining us very soon) and I have all been quoted extensively by the AML sites Moneylaundering.com and Fortent Inform about a lesser-known area of terror financing.
The article, entitled "Terrorists’ Gaming of Securities Markets a Serious Threat, Say Analysts," explains how the international securities markets create an opportunity for money to be transferred for terrorist activity (and indeed, for profits to be made by terrorist groups), using various forms of publicly-traded financial instruments in the world security markets. The subject has aroused a lot of attention ever since rumours circulated after 9/11 that Usama bin Laden and his colleagues had made large profits by short-selling securities just before the attack took place, in order to then make a return after the securities dropped in the wake of the attack. There has never been public confirmation of these rumours, but the issue occasionally gathers media and public attention, as in a recent Barrons article about terrorist finance in the investment markets.
What is certain is that the regulators, and the securities industry itself, haven’t made sufficient efforts to secure the markets against their exploitation by terror financiers and money launderers, especially the large-scale ones such as Yasser Arafat and other corrupt political leaders who simply rob their people for their own enrichment (a point driven home by Rachel in the article). More needs to be done, both to identify investors in the markets and to track suspicious market transactions: more of this, I hope, in a more detailed article in the next few days.
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