Finra
A customer makes several cash deposits of $9,500 over consecutive days to avoid the CTR reporting threshold. This practice is known as:
Structuring = breaking up transactions to avoid CTR. Placement, layering, integration are the 3 stages of money laundering.
Complete Analysis & Legal Rationale
Structuring (also called "smurfing") is intentionally breaking up transactions to avoid the $10,000 CTR reporting threshold. This is illegal and should be reported via a Suspicious Activity Report (SAR), even though individual transactions are below the threshold.
Distractor Autopsy (Why Other Options Are Traps)
FINRA exam writers design incorrect distractors using specific calculation mistakes and regulatory misconceptions. Review why each option succeeds or fails:
Does not match the governing securities rule described in the explanation.
Does not match the governing securities rule described in the explanation.
Matches the verified teaching point in the explanation.
Does not match the governing securities rule described in the explanation.
Official Standard: Requires AML programs consistent with Bank Secrecy Act obligations (verify current text).
Official Standard: Outline-level citation: item maps to Series 7 topic coverage. Prefer a specific FINRA/SEC/MSRB rule citation in a later author pass.