Maverick Partners LLC – COMPLIANCE AND WRITTEN SUPERVISORY PROCEDURES MANUAL
SECTION 4. ANTI-MONEY LAUNDERING PROGRAM
1. AML Policy
It is the policy of Maverick Partners LLC (“Maverick Partners”) to prohibit and actively prevent money laundering and any activity that facilitates money laundering or the funding of terrorist or criminal activities. Money laundering is generally defined as engaging in acts designed to conceal or disguise the true origins of criminally derived proceeds so that the unlawful proceeds appear to have derived from legitimate origins or constitute legitimate assets. Generally, money laundering occurs in three stages. Cash first enters the financial system at the "placement" stage, where the cash generated from criminal activities is converted into monetary instruments, such as money orders or traveler's checks, or deposited into accounts at financial institutions. At the "layering" stage, the funds are transferred or moved into other accounts or other financial institutions to further separate the money from its criminal origin. At the "integration" stage, the funds are reintroduced into the economy and used to purchase legitimate assets or to fund other criminal activities or legitimate businesses. Terrorist financing may not involve the proceeds of criminal conduct, but rather an attempt to conceal the origin or intended use of the funds, which will later be used for criminal purposes.
2. Maverick Partners Business
Maverick Partners is currently engaged in the business of proprietary trading of equities, options and futures. Maverick Partners does not conduct a customer business and does not have or carry customer accounts. In addition, Maverick Partners does not have or carry any foreign bank or foreign securities accounts.
3. Procedures on Receipt and Disbursement of Funds
Maverick Partners does not accept cash or securities from anyone and only accepts funds via checks or
wire transfers from individuals or entities that have a disclosed ownership interest in a Broker-
Dealer. The identities of these individuals and entities are reviewed when they become employees or
members of the Firm and they are checked against US Department of Treasury’s SDN List. The
identities of the individuals are verified specifically by obtaining copies of their current driver’s
licenses or passports with photographs.
Any transfers of funds are related to this activity in the normal course of business.
Maverick Partners has several outside bank accounts related to its broker-dealer business activities. All
transfers of funds are effected through the Broker-Dealer’s clearing firm account or its outside bank
In regard to its employees and members with a disclosed ownership interest, Maverick Partners does not accept or issue third party checks or wire transfers from or to these individuals and entities and thereby knows the sources and destinations of these fund transfers. All such transfers
directly from and to these individuals and entities are reviewed specifically and approved by a
senior manager. The members that are entities must also confirm that any financial backers
or investors are not subject to money laundering concerns or suspicious activities.
4. AML Compliance Officer Designation and Duties
Jon Frohlich is designated as the Anti-Money Laundering Program Compliance Officer, with full
responsibility for the AML Compliance Program of Maverick Partners. The duties of the Compliance Officer will include monitoring compliance and communication, overseeing training for employees and members, reviewing procedures and reviewing the results of the annual testing of the AML Compliance Program. The Compliance Officer will also ensure that proper records are kept. When warranted, the Compliance Officer will ensure that Suspicious Activity Reports (SARs) are filed with the Financial Crimes Enforcement Network (FinCEN).
5. Checking the Office of Foreign Assets Control (OFAC) List
Before opening an account, and on an ongoing basis, we will check to ensure that a member does not
appear on Treasury’s OFAC “Specifically Designated Nationals and Blocked Persons” List (SDN
List) (See the OFAC Web Site at www.treas.gov/ofac, which is also available through an automated
search tool on www.nasdr.com/money.asp), and is not from, or engaging in transactions with people
or entities from, embargoed countries and regions listed on the OFAC Web Site. Because the OFAC
Web Site is updated frequently, we will consult the list on a regular basis and subscribe to receive
updates when they occur. We may access these lists through various software programs to ensure
speed and accuracy. We will also review existing accounts against these lists when they are updated
and we will document our review.
In the event that we determine a member, or someone with or for whom the member is transacting, is
on the SDN List or is from or engaging in transactions with a person or entity located in an
embargoed country or region, we will reject the transaction and/or block the member's assets and file
a blocked assets and/or rejected transaction form with OFAC. We will also call the OFAC Hotline at
6. Comparison with Government Lists of Terrorists and Other Criminals
From time to time, we may receive notice that a Federal government agency has issued a list of
known or suspected terrorists. Within a reasonable period of time after an account is opened (or
earlier, if required by another Federal law or regulation or Federal directive issued in connection
with an applicable list), we will determine whether a member appears on any such list of known or
suspected terrorists or terrorist organizations issued by any Federal government agency and
designated as such by Treasury in consultation with the Federal functional regulators. We will
follow all Federal directives issued in connection with such lists. We will continue to comply with
Treasury’s Office of Foreign Asset Control rules prohibiting transactions with certain foreign
countries or their nationals.
7. FinCEN Requests Under PATRIOT Act Section 314
Under Treasury’s final regulations (published in the Federal Register on September 26, 2002), we
will respond to a Financial Crimes Enforcement Network (FinCEN) request about accounts or
transactions by immediately searching our records, at our head office or at one of our branches
operating in the United States, to determine whether we maintain or have maintained any account
for, or have engaged in any transaction with, each individual, entity, or organization named in
FinCEN's request. Upon receiving an information request, we will designate one person to be the
point of contact regarding the request and to receive similar requests in the future. Unless otherwise
stated in FinCEN's request, we are required to search current accounts, accounts maintained by a
named suspect during the preceding 12 months, and transactions conducted by or on behalf of or
with a named subject during the preceding six months. If we find a match, we will report it to
FinCEN by completing FinCEN’s subject information form. This form can be sent to FinCEN by
electronic mail at firstname.lastname@example.org, (or if you don’t have e-mail,) by facsimile transmission
to 703-905-3660. If we search our records and do not uncover a matching account or transaction,
then we will not reply to a 314(a) request.
8. Foreign Correspondent Accounts and Foreign Shell Banks
Maverick Partners will detect and prohibit the opening foreign correspondent accounts (any account that permits a foreign financial institution to engage in securities or futures transactions, funds transfers, or other types of financial transactions) for foreign banks or institutions and particularly for unregulated
foreign shell banks. The firm will also detect whenever possible and prohibit the opening of
accounts providing services to foreign banks and foreign shell banks. This detection will be done by
specific investigations and reviews of member identification documents for all members by the
Compliance Officer to identify any foreign banks, foreign shell banks or accounts being used to
provide services to such banks or institutions and thereby to prevent such accounts from being
opened. (Foreign shell banks are foreign banks without a physical presence in any country.)
Upon finding or suspecting such an account exists among accounts already opened, firm employees
will notify the Compliance Officer who will investigate and then terminate any verified
foreign correspondent account held in the United States for a foreign bank or institution including an
unregulated foreign shell bank. The Compliance Officer will also terminate any foreign
correspondent account that is not maintained directly by a foreign bank or unregulated foreign shell
bank but is being used to provide services to such a foreign bank or shell bank. The firm will
exercise caution regarding liquidating positions in such accounts and take reasonable steps to ensure
that no new positions are established in these accounts during the termination period.
9. Private Banking Accounts and Foreign Officials
We do not open or maintain “private banking” accounts or accounts for a “senior foreign political
figure” as defined below. We will detect such accounts by specific reviews of member identification
documents particularly for foreign accounts by the Compliance Officer.
A "private banking" account is an account (or any combination of accounts) that requires a minimum
aggregate deposit of $1,000,000, is established for one or more individuals, and is assigned to or
administered or managed by, in whole or in part, an officer, employee, or agent of a financial
institution acting as a liaison between the financial institution and the direct or beneficial owner of
A "senior foreign political figure" includes a current or former senior official in the executive,
legislative, administrative, military or judicial branches of a foreign government (whether elected or
not), a senior official of a major foreign political party, or a senior executive of a foreign
government-owned commercial enterprise; a corporation, business, or other entity formed by or for
the benefit of any such individual; an immediate family member of such an individual; or any
individual publicly known (or actually known by the firm) to be a close personal or professional
associate of such an individual.
10. Review of Special Measures Under Section 311 of the Patriot Act
The Compliance Officer will receive automated FinCEN updates via e-mail and will
periodically review Rulemakings Listed in Chronological Order on the FinCEN web site under
Section 311 - Special Measures of the Patriot Act.
Upon receiving or finding that a new rule or rules have been passed, the Compliance Officer
will implement such rules as needed and as appropriate that apply to Maverick Partners. Specifically, the AMLCompliance Officer will review member accounts for any transactions for entities covered under new rules in Section 311. While Maverick does not expect to have correspondent accounts, the
Compliance Officer will notify any such accounts as required by any rule implemented pursuant to
11. Suspicious Transactions and BSA Report Filing a Form SAR-SF
We will file Form SAR-SFs for any account activity (including deposits and transfers) conducted or
attempted through our firm involving (or in the aggregate) $5,000 or more of funds or assets where
we know, suspect, or have reason to suspect: 1) the transaction involves funds derived from illegal
activity or is intended or conducted in order to hide or disguise funds or assets derived from illegal
activity as part of a plan to violate or evade federal law or regulation or to avoid any transaction
reporting requirement under federal law or regulation, 2) the transaction is designed, whether
through structuring or otherwise, to evade the any requirements of the BSA regulations, 3) the
transaction has no business or apparent lawful purpose or is not the sort in which the member would
normally be expected to engage, and we know, after examining the background, possible purpose of
the transaction and other facts, of no reasonable explanation for the transaction, or 4) the transaction
involves the use of the firm to facilitate criminal activity.
We will not base our decision on whether to file a SAR-SF solely on whether the transaction falls
above a set threshold. We will file a SAR-SF and notify law enforcement of all transactions that
raise an identifiable suspicion of criminal, terrorist, or corrupt activities. [See: NtM 02-21, page 9.]
In high-risk situations, we will notify the government immediately (See Section 8 for contact
numbers) and will file a SAR-SF with FinCEN. Securities law violations that are reported to the
SEC or a Self-Regulatory Organization (SRO) may also be reported promptly to the local U.S.
Attorney, as appropriate.
We will not file SAR-SFs to report violations of Federal securities laws or SRO rules by our
employees or registered representatives that do not involve money laundering or terrorism, but we
will report them to the SEC or SRO. [See: NtM 02-21, page 10, n.35.]
All SAR-SFs will be periodically reported to senior management, with a clear reminder of the need
to maintain the confidentiality of the SAR-SF.
We will report suspicious transactions by completing a SAR-SF and we will collect and maintain
supporting documentation as required by the BSA regulations. We will file a SAR-SF no later than
30 calendar days after the date of the initial detection of the facts that constitute a basis for filing a
SAR-SF. If no suspect is identified on the date of initial detection, we may delay filing the SAR-SF
for an additional 30 calendar days pending identification of a suspect, but in no case, will the
reporting be delayed more than 60 calendar days after the date of initial detection.
We will retain copies of any SAR-SF filed and the original or business record equivalent of any
supporting documentation for five years from the date of filing the SAR-SF. We will identify and
maintain supporting documentation and make such information available to FinCEN, any other
appropriate law enforcement agencies, or federal or state securities regulators, upon request.
We will not notify any person involved in the transaction that the transaction has been reported,
except as permitted by the BSA regulations. We understand that anyone who is subpoenaed or
required to disclose a SAR-SF or the information contained in the SAR-SF, except where disclosure is
requested by FinCEN, the SEC, or another appropriate law enforcement or regulatory agency or an
SRO registered with the SEC, will decline to produce to the SAR-SF or to provide any information
that would disclose that a SAR-SF was prepared or filed. We will notify FinCEN of any such request
and our response.
12. AML and SAR Record Keeping
VPRO will hold SAR-SFs and any supporting documentation confidential. We will not inform
anyone outside of a law enforcement or regulatory agency or securities regulator about a SAR-SF.
We will refuse any subpoena requests for SAR-SFs or SAR-SF information and immediately tell
FinCEN of any such subpoena we receive. We will segregate SAR-SF filings and copies of
supporting documentation from other firm books and records to avoid disclosing SAR-SF filings.
Our AML Compliance Officer will handle all subpoenas or other requests for SAR-SFs. We will
share information with our clearing broker about suspicious transactions in order to determine when
a SAR-SF should be filed. As mentioned earlier, we may share with the clearing broker a copy of
the filed SAR-SF – unless it would be inappropriate to do so under the circumstances, such as where
we file a SAR-SF concerning the clearing broker or its employees.
VPRO’s AML Compliance Officer and his or her designee will be responsible to ensure that AML
records are maintained properly and that SARs are filed as required.
As part of our AML Program, VPRO will create and maintain SAR-SFs, CTRs, CMIRs, FBARs, and
relevant documentation on member identity and verification and transmittals as well as any records
related to members listed on the OFAC list. We will maintain SAR-SFs and their accompanying
documentation for at least five years. We will keep other documents according to existing BSA and
other record keeping requirements, including certain SEC rules that require six-year retention.
13. Senior Management Approval of AML Program
I hereby attest that Maverick Partners does not conduct a non-member customer business and does not
receive customer funds or customer securities. I have approved this AML Compliance Program as
reasonably designed to achieve and monitor ongoing compliance with the requirements of the USA
PATRIOT Act and the implementing regulations under the Bank Secrecy Act.
Signed: By Robb Reinhold
Print Name: Robb Reinhold
Date: October 23, 2009
I have read and understand the Maverick Partners, LLC Statement of Compliance pursuant to the
Anti-Money Laundering Rules.
Member/Employee Name and Date: