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#1214097 - 07/08/09 03:30 PM Insider Abuse Reporting
compliancemom Offline
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Joined: Mar 2009
Posts: 22
West TN
I read somewhere that in addition to filing a SAR for insider abuse, it is sometimes advisable to notify the bank's regulator of an incident. Our situation is rather messy and has the potential to go public. Looking for advice to present to our CEO. Links to any published guidance would also be helpful...

If only Mondays had accelerators and Fridays had brakes...

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#1214217 - 07/08/09 04:59 PM Re: Insider Abuse Reporting compliancemom
Elwood P. Dowd Offline
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Elwood P. Dowd
Joined: Aug 2001
Posts: 21,939
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Your regulator has access to the SAR data base and should see it there. They will definitely see it during their next on-site exam; i.e. it's not a secret.

I'm not aware of any published advice, but will fall back on what I learned in high school: If there was a story that might be told about me I wanted my Father to hear it from me first.

Consider thoroughly researching then preparing the SAR, but then call the EIC from your last BSA exam and run the situation past him or her. Alternatively, you could contact the regional office.
In this world you must be oh so smart or oh so pleasant. Well, for years I was smart. I recommend pleasant.

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#1214278 - 07/08/09 05:37 PM Re: Insider Abuse Reporting Elwood P. Dowd
Retread Offline
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Joined: Oct 2003
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Published guidance is going to scarce if not nonexistent. There are two good reasons to notify your regulator. You mentioned this could be messy with the potential to go public. Your regulator may be able to help out with damage control. With the fragile state of many banks these days, you may want your regulator standing by in case your customers panic. The second reason involves the suspect. If the abuse is ongoing, the regulator can issue a prohibition order to have the party removed from the bank. That is something a SAR cannot accomplish unless you can convince law enforcement to arrest the suspect on the spot without an investigation.

The closest thing you are going to get to "official" guidance is in the SAR regulations which state for OTS banks, "In situations involving violations requiring immediate attention, such as when a reportable violation is ongoing, the savings association or service corporation shall immediately notify, by telephone, an appropriate law enforcement authority and the OTS in addition to filing a timely SAR." The rules are the same for all regulators. Immediate attention could also include "possible adverse reaction in the community" or if the abuse may cause serious financial problems for the bank.

My advice is to call the regulator.

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