Certified Anti-Money Laundering Specialist Certification (CAMS) Practice Exam

What action is often illegal if it reveals information about SAR filings?

1. Disclosing reports to law enforcement

2. Sharing information with other employees

3. Tip off a customer

4. Conducting audits on the filings

The correct answer is: Tip off a customer

The action of tipping off a customer is often illegal because it violates the "no tipping off" provisions inherent in laws governing Suspicious Activity Reports (SARs). When a financial institution files a SAR, it is conveying suspicions about potential money laundering or other financial crimes to law enforcement. The intent of this regulation is to prevent criminals from being aware of the investigations that might be occurring based on the report, which could allow them to destroy evidence or change their behavior to evade detection. In this context, alerting a customer that they are being investigated or that a SAR has been filed can undermine law enforcement operations and compromise investigations. The prohibition against tipping off ensures that suspicious activities can be investigated without interference or the opportunity for the subject of the investigation to alter their behavior. In contrast, disclosing reports to law enforcement is typically a legal requirement and essential for the effective reporting of suspicious activities. Sharing information with other employees, while sensitive, may be permissible within the bounds of internal compliance procedures, provided that proper protocols are followed. Conducting audits on the filings is a standard part of a financial institution's compliance program to ensure that processes are followed correctly and does not infringe on the confidentiality of SARs.