Shahre Bours- Rouhollah Najafi, CEO of Wealth Wave Asset Management, discussed the current state of Iran’s capital market and key challenges in reducing money laundering risks. “Recent measures restricting cash flows have significantly mitigated traditional money laundering risks,” Najafi stated, citing bans on third-party bank card payments via online gateways and prohibitions on cash and gift card transactions as effective steps.
Persistent Threats and Structural Gaps
Despite these advancements, Najafi warned that serious risks persist, including price manipulation, insider trading, and fraud, which can generate illicit income and facilitate money laundering. “The use of proxy trading accounts, fake identities, or shell companies, coupled with inadequate monitoring of abnormal trading patterns and unrealistic stock valuations, enables the concealment of illicit funds,” he explained.
Najafi identified a critical structural flaw: the inability to accurately assess expected investor activity levels. “Without access to clients’ income, employment, and financial data, financial institutions struggle to compare actual behavior with expected patterns, hindering the detection of violations,” he noted. He also highlighted the absence of a centralized database for high-risk individuals in the Securities and Exchange Organization’s anti-money laundering system and a lack of coordination among financial institutions in implementing robust client verification processes.
Proposed Solutions for Enhanced Oversight
To strengthen anti-money laundering measures, Najafi proposed developing intelligent systems to assess business interaction risks and detect suspicious trading patterns. “Effective action against predicate crimes—such as market manipulation, insider trading, fraud, and misleading practices—is essential to combat money laundering,” he emphasized.
He stressed the need for rigorous scrutiny of funding sources during corporate capital increases, particularly in methods like cash contributions, pre-emption rights waivers, or asset revaluations, to prevent the influx of illicit funds. Najafi also called for rapid identification and analysis of abnormal trading patterns or shifts in client behavior.
Leveraging Data and Coordination
Najafi underscored the importance of utilizing Chapter III of the Anti-Money Laundering Law’s executive regulations, which enables institutions to establish expected client activity levels and align financial behavior with risk profiles. “Creating a centralized high-risk individual database within the Securities and Exchange Organization’s anti-money laundering system, alongside uniform enhanced due diligence by financial institutions, would significantly bolster the market’s defenses,” he concluded. Social media posts on X reflect growing investor awareness of these risks, with some urging stricter oversight to protect market integrity.
