Magazine article American Banker

Some Fear SAR Leaks Will Lead to Fewer Filings

Magazine article American Banker

Some Fear SAR Leaks Will Lead to Fewer Filings

Article excerpt

Recent leaks of information from confidential suspicious activity reports are stoking fears that the casual release of such data could inhibit future filings, harm bankers' reputations, and help criminals.

The disclosures have already drawn a protest from Financial Crimes Enforcement Network Director William Fox, who said federal investigators are pursuing the matter. But industry representatives demanded that federal authorities better protect the sensitive documents.

"We are outraged that there have been leaks of very confidential and federally protected documents in any investigation," said John Byrne, the head of the American Bankers Association's Center for Regulatory Compliance. "For these documents to have any value, we have to know at the end of the day that these are protected documents."

The issue first surfaced in an article in the April 7 issue of Newsweek which used information from, and quoted, SARs filed by Fleet National Bank of Boston. An article in Sunday's issue of The Washington Post used information and quotes from more than a dozen SARs filed by Riggs Bank. Neither article revealed the source of the reports.

Industry officials and observers said bankers may file fewer or less-detailed SARs if they believe the reports will go public.

"Once financial institutions suspect that the highly sensitive information they are filing on a SAR might be publicly disclosed, they may be reticent to be as candid and forthcoming as they have been in the past," said Peter Djinis, a former top official at Fincen, who has founded his own law firm.

"What you have to remember is that virtually every SAR represents a determination or at least a suspicion by the bank that one of its customers was involved in some type of illegal activity," he said. "It's a very serious allegation. …

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