Compliance Institute was featured in media coverage in the Irish Independent both online and in print (see below)
Your personal finance questions – Will changes to the State pension affect my plans to retire next year?
Q I am about to buy a new car and want to pay in cash but the dealer is insisting I pay by bank draft. He says under anti-money laundering rules, he can’t accept cash payments of more than €10,000. Is that right? It would be much handier if I could just pay in cash.
A Under anti-money laundering rules, certain businesses have obligations to guard against their business being used for the purposes of money-laundering or terrorist financing, said the chief executive of the Compliance Institute, Michael Kavanagh.
This includes any business, such as car dealerships, which trades in goods where cash payments of €10,000 or more are accepted. Car dealers are monitored by the State’s Anti-Money Laundering Compliance Unit (AMLCU) to ensure they are meeting their obligations under anti-money laundering rules. Failure to comply with their obligations in this regard could see the dealer fined or imprisoned or both.
Car dealers must fill out a cash transaction form designed by the AMLCU for each cash transaction they handle, especially those of €10,000 or more. Where cash of €10,000 or more is being paid, in advance of the transaction, the dealer must also get a copy of the customer’s ID and a recent utility bill in the name of the customer.
For all of these reasons, it is safer and more straightforward for your car dealer to insist that you pay by bank draft. Mr Kavanagh said.
Q I work as an auditor. Shortly after I completed an audit for a company, by chance, I became aware that my mother had bought a substantial number of shares in that company. During the audit, serious financial irregularities emerged. Knowing that my mother stood to lose a lot of money once those irregularities became public, I advised her to sell her shares. She sold them promptly and avoided the losses which other shareholders subsequently suffered. I’m worried I might have breached inside trading rules?
A When it comes to insider trading rules, to be deemed an ‘insider’, you must be in possession of information that is not public, such as advance notice of a company's earnings or financial irregularities.
If you take this information and trade on it or give it to others and they trade on it, you can usually expect repercussions, said Michael Kavanagh, chief executive of the Compliance Institute.
As your mother was a shareholder, you should never have audited this company, though it appears you did not realise this until the audit was complete, which could exonerate you on this particular point.
As your mother was a shareholder, you should never have audited this company
However, your decision to act on the inside information you had and instruct your mother to sell her shares is a breach of insider trading rules because an insider who is aware of non-public material must not disclose such information to family, friends, business or social acquaintances, and other third parties, Mr Kavanagh said.
The responsible thing to do at this juncture would be to immediately inform your superiors of this breach. Be aware that you could face sanctions for the offence.