As SAR Data Grows for Securities Industry, Reports of Microcap Fraud Rise
By Colby Adams and Brian Orsak
Changes to how and how often securities firms report suspicious activity are helping to clarify the scope of a long-familiar financial crime: microcap fraud. In a speech Wednesday, the director of the Financial Crimes Enforcement Network (FinCEN) disclosed that between one-third and one-half of the thousands of suspicious activity reports (SARs) that the bureau turns over to the Securities and Exchange Commission (SEC) every year relate to microcap stocks, which derive from companies with low net tangible assets. The number of annual microcap-related reports, which has been on the upswing for years, is "really astounding," Sarah Green, the then-Bank Secrecy...
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