Financial institutions often encounter suspicious transactions
that warrant the filing of a suspicious activity report
("SAR"). When this occurs, the Bank Secrecy Act
("BSA") and federal regulations specifically prohibit the
unauthorized disclosure of the SAR, or any information that may
reveal the existence of the SAR. This confidentiality requirement
may place certain employees, especially those holding close
relationships with customers who are the subject of a SAR, in a
difficult position. Significant work may have gone into
developing the relationship, which may be a source of substantial
current or future revenue for the institution.
Loyalty to a revenue-generating customer, however, should never
trump one's legal obligation of confidentiality. The
penalties are simply too severe. Federal law provides for
civil penalties of up to $100,000 for each violation, and criminal
penalties that include fines of up to $250,000 and/or imprisonment
of up to 5 years.1
