A bank should have its blinders on regarding outside events and SAR filings. If it detects suspicious activity, but that suspicious activity has stopped, it does not matter why it stopped, it is still required to file the SAR.
The AmSouth decree lists a number of instances where the bank did not know of the suspicious activity until criminal or civil proceedings involving its customers were already under way. Each of those instances is cited as an example of where the bank failed to file a SAR as required by law.
In the instant case, it was apparently the state that detected the unlicensed operation. However, if the unlicensed MSB has been used to conduct illegal activity prior to its discovery law enforcement would still be interested. Even if there is a basis for believing the state regulatory agency notified law enforcement, that has no effect on the bank's responsibility to do so. The language quoted above is explicit and unqualified.
The only acceptable reason for not filing a SAR is because the law does not require it, not because the activity has ceased or because law enforcement was already aware of it.