Regulatory Alerts2004-05-24
Added
Federal Court Reaffirms Protections For Financial Institutions Filing Suspicious Activity Reports
The federal district court in Whitney Nat’l Bank v. Karam ruled that the safe harbor provision of the Bank Secrecy Act affords unqualified protection to financial institutions and their employees from civil liability for filing Suspicious Activity Reports. The decision prohibits the production of documents in discovery that evidence the existence or contents of a SAR, communications pertaining to its filing, or communications with government authorities related to the suspected violations. This protection does not extend to documents generated or received in the ordinary course of business upon which a SAR was based, unless producing them would confirm the existence of a SAR. The five federal financial institutions supervisory agencies and FinCEN believe these rulings apply to all financial institutions filing SARs in accordance with agency regulations.