Source: International Herald-Tribune IHT Source: Bloomberg News Contact: Pubdate: Tue, 03 Mar 1998 Editors note: The International Herald-Tribune (IHT), which I believe is the largest circulation English language newspaper in Europe outside the UK (Peter, please correct me if I am wrong) reprints nearly all of its articles from various U.S. newpapers. So, to help our readers identify the original source that IHT used, we plan to start showing the ITH Source: lead line, when appropriate. BROKERS PUT ON NOTICE OVER LAUNDERING WASHINGTON --- The U.S. Treasury Department will propose rules requiring securities brokers to report evidence of possible money laundering, as banks now must do Treasury and Securities and Exchange Commission officials said. The proposal, to be issued in the next three months, comes as criminal prosecutors are stepping up their investigations of securities fraud. At least two brokers were charged with money laundering following an FBI sting in October 1996 that led to the arrest of 45 stock promoters, company of ficers and brokers. Catherine McGuire, chief counsel of the SEC's market-regulation division, said the proposal would increase the responsibility of broker-dealers to report suspicious activity involving the possible concealment of funds. "Brokers need to know this is coming down the pike," Ms. McGuire said Saturday at the "SEC Speaks" conference in Washington. The proposal is being developed by Treasury's Financial Crimes Enforcement Network, one of the department's five law-enforcement bureaus, a Treasury spokeswoman said. It will be issued for comment for 90 days, and Treasury officials will review the responses before de ciding whether to adopt the rule. Money laundering occurs when illegal proceeds are concealed, often through banking or currency transactions. A broker who defrauds investors might seek to mask the source of this illicit activity by cycling the investors' money through a foreign broker, said Henry Klehm, a senior SEC enforcement official in New York. Illegal drug proceeds can laundered through investments made with'a brokerage, he said. The Securities Industry Association, which represents 800 of the largest U.S. brokerages, has been working with Treasury officials on the proposal.