Wall Street's hot trade: compliance officers

Wed Oct 9, 2013 6:59am EDT
 
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By Aruna Viswanatha

WASHINGTON Oct 9 (Reuters) - The kings of Wall Street used to be the traders and investment bankers who said yes to big deals and big trades, but today's power brokers increasingly are the compliance officers who quite often say no to risky proposals.

As the U.S. government steps up enforcement of anti-money laundering laws, it has created a red-hot market for compliance officers, who oversee a bank's systems that prevent it from violating regulatory requirements and monitor transactions for any suspicious activity.

According to recruiters, the demand for compliance expertise exceeds the pool of qualified professionals, forcing banks to poach from each other - sometimes by offering to double salaries and other perks like flexible work schedules.

JPMorgan Chase & Co, which has announced plans to improve compliance across the bank as it faces a bevy of regulatory investigations, has more than 300 job openings for anti-money laundering professionals, according to its website. That is the equivalent of hiring an entire compliance department for many other financial institutions.

"There are not a lot of high-caliber people left in the marketplace," said legal recruiter Jason Wachtel, who runs the search firm JW Michaels & Co.

Wachtel said he knows of a "very big bank" that offered to pay more than $1 million to a potential new director for its anti-money laundering program, a sum that would have been unheard of a few years ago. The candidate ultimately rejected the offer, Wachtel said, in a move that highlights the extent to which experienced officers command the upper hand.

Wall Street's focus on compliance has been years in the making. Much of it dates back to October 2003, when a provision of the Patriot Act that required financial institutions to verify the identities of certain customers went into effect. Banks were then forced to bolster so-called AML (anti-money laundering) compliance departments to monitor their customers and transactions.

But it was only in recent years - after the 2008-2009 financial crisis - that regulators and prosecutors have intensified a crackdown on the flow of money tied to suspected terrorist activity, drug lords and tax evaders.   Continued...