Six financial lobbying groups are asking the U.S. Supreme Court to shield banks from lawsuits targeting them for reporting suspicions about their clients that turn out to be false. In a petition for certiorari filed Oct. 22, the American Bankers Association, Independent Community Bankers of America, The Clearing House and state associations in Louisiana, Mississippi and New York asked the justices to resolve conflicting lower court decisions on whether banks are immune from prosecutions for the suspicious activity reports (SARs) they file. While the First Circuit and Second Circuit Court of Appeals have ruled that financial institutions have "absolute immunity"...
Financial institutions must keep a tight lid on investigations of suspicious account activity, even when transactional alerts don't merit federal regulatory reporting, the U.S. Treasury Department said Tuesday.
Nearly 60 percent of the suspicious activity reports filed in fiscal 2006 had missing, incorrect or incomplete data in fields critical to law enforcement agencies, according to a federal watchdog report.
Poorly thought out responses to law enforcement requests for additional information on suspicious activity can end up exposing banks to civil lawsuits or regulatory actions, according to compliance professionals.
An Arkansas state appellate court ruling has bankers worried that the heretofore impregnable U.S. Bank Secrecy Act "safe harbor" protection they receive for filing suspicious activity reports may not be airtight.