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Financial Services Law Insights and Observations

SEC charges bank with SAR violations

Securities SEC Enforcement Securities Exchange Act Anti-Money Laundering SARs Financial Crimes


On May 20, the SEC announced charges against a national bank for allegedly failing to file Suspicious Activity Reports (SARs) in a timely manner in violation of the Securities Exchange Act and Rule 17a-8. According to the SEC’s order, the bank’s internal anti-money laundering (AML) transaction monitoring and alert system allegedly failed to reconcile the different country codes used to monitor foreign wire transfers because the bank allegedly failed to test a new version of the system. The bank also allegedly did not timely file SARs related to suspicious transactions in its customers’ brokerage accounts involving the wire transfers to or from foreign countries that it determined to be at a high or moderate risk for money laundering, terrorist financing, or other illegal money movements. Additionally, in April 2017, the bank allegedly failed to timely file additional SARs due to a failure to appropriately process wire transfer data into its AML transaction monitoring system in certain other situations. In addition to the $7 million penalty, the bank, without admitting or denying the SEC’s findings, agreed to a censure and a cease-and-desist order.

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