Bank Suspicious Activity|Reports Now More Secret

WASHINGTON (CN) - Banks and institutions regulated by the Financial Crimes Enforcement Network must keep reports of suspicious banking activity confidential to the point that they do not reveal the reports to other government agencies or branches of government, even when presented with a civil enforcement subpoena, according to new agency regulations.

The Financial Crimes Enforcement Network or FinCEN is the Treasury Department's lead agency linking law enforcement to financial industry regulators.

This expansive construction of FinCEN's regulations prohibiting the disclosure of investigations or potential investigations of "suspected activity reports" or SARs extends to law enforcement officers, corporate boards and bureaucrats.

Instead, FinCEN will advise other agencies on a need-to-know basis about the existence of a SAR investigation. Banks are required to notify FinCEN when other agencies make specific inquiries about the existence of an SAR report or investigation.

SARs have been kept confidential under current regulations, and it has been against the law to disclose the existence of a report or an investigation to individuals or organizations that might be the subject of a report or investigation.

Banks may provide information on the underlying financial transactions when subpoenaed, or as allowed by law, as long as they do not reveal that the information requested relates to a SAR investigation.

The agency expects other federal bank regulatory agencies to propose similar rules, according to the new regulation, which goes into effect Jan. 3, 2011.

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.

Email *

Submit