Financial institutions know that suspicious activity reports
(SARs) and information that would reveal a SAR's existence may
not be disclosed except under specific, limited circumstances.
However, when you're facing a civil discovery request,
deciphering exactly what falls within the privilege can be a
challenge.
Take one recent decision from the Court of Appeals of the State
of Washington. That court applied the privilege not only to SARs
and information that would reveal their existence, but also to a
bank's internal systems for detecting money laundering and
monitoring suspicious activity, and even to the identity of the
individuals conducting these internal
investigations.1
And while financial institutions may welcome this
privilege-friendly interpretation of the applicable regulations,
other courts have not cast the net so broadly. As one court has
stated regarding internal investigative materials, "although a
bank may undertake an internal investigation in
