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.