Financial Institutions Warned Not to Overreact to Negative Media Reports

The Financial Crimes Enforcement Network (FinCEN) has issued a reminder to financial institutions to exercise caution when reviewing negative media reports, emphasizing that they do not automatically trigger the filing of a Suspicious Activity Report (SAR).

Using Judgment When Reviewing Negative Media Reports

Financial institutions must use their own judgment when reviewing negative media reports to determine whether they pose a risk to the institution or its customers. FinCEN emphasized that a single report does not necessarily indicate suspicious activity.

“Financial institutions should not automatically file a SAR based on a single news article or report,” said a FinCEN spokesperson. “Instead, they must use their own judgment and review all relevant information before deciding whether to file a report.”

Confidentiality Provisions

Financial institutions are also reminded that certain law enforcement inquiries may be subject to specific confidentiality provisions, such as National Security Letters. In these cases, institutions should not disclose the existence or nature of the inquiry without proper authorization.

Avoiding Duplicate Filings

In addition, FinCEN cautioned against filing multiple SARs based on the same event, citing the need for financial institutions to focus their reporting efforts and avoid duplicate filings.

Requirements for SAR Narratives

The agency also provided guidance on the requirements for SAR narratives, emphasizing that information already included in other sections of a SAR does not need to be repeated unless it is necessary to provide a clear and complete description of the suspicious activity.