FinCEN Confidentiality Advisory Reminds of Penalties

The Financial Crimes Enforcement Network (FinCEN) expressed concern that an increasing number of private parties, who are not authorized to know of the existence of filed Suspicious Activity Report (SARs), are seeking SARs from financial institutions for use in civil litigation and other matters.

FinCEN issued an advisory Friday to financial institutions, and "in particular, the lawyers that advise them," that Bank Secrecy Act rules require confidentiality of SARs.

"Financial institutions, and their current and former directors, officers, employees, agents, and contractors, are prohibited from disclosing SARs, or any information that would reveal the existence of a SAR," FinCEN reminded.

"This is especially true when external counsel is unfamiliar with the regulations covering SAR confidentiality. Financial institutions, and their current and former directors, officers, employees, agents, and contractors could be subject to civil and criminal penalties for the unauthorized disclosure of a SAR," FinCEN warned.

The unauthorized disclosure of a SAR is a violation of federal law. The agency noted that both civil and criminal penalties may be imposed for SAR disclosure violations:  Violations may be enforced through civil penalties of up to $100,000 for each violation and criminal penalties of up to $250,000 and/or imprisonment not to exceed five years.

For more on the FinCEN advisory, including associated penalties, click here.