CAMS · Question #233
At a small community bank, the compliance officer identifies unusual activity on a customer, who with his personal and company accounts, is the bank's largest depositor. The customer's companies…
The correct answer is C. By providing a high level summary of the activity and the interactions with law enforcement. The compliance officer should provide a high level summary of the activity and the interactions with law enforcement to the board of directors, as this would be the most appropriate way to escalate the information without compromising the confidentiality of the STR or the…
Question
At a small community bank, the compliance officer identifies unusual activity on a customer, who with his personal and company accounts, is the bank's largest depositor. The customer's companies have significant balances on their outstanding loans. The compliance officer notices that there is a lot of unusual movements of money between the customer's individual and business accounts. After filing a suspicious transaction report (STR), the compliance officer gets a call from law enforcement indicating that they want the bank to keep the account open while they conduct an investigation into the customer. How should the compliance officer escalate this information to the board of directors?
Options
- ABy providing a copy of the STR to the board
- BBy informing the regulator to bring it up with their next meeting with the board
- CBy providing a high level summary of the activity and the interactions with law enforcement
- DBy providing a copy of the letter from law enforcement asking the bank to keep the account open.
How the community answered
(24 responses)- A4% (1)
- B13% (3)
- C79% (19)
- D4% (1)
Explanation
The compliance officer should provide a high level summary of the activity and the interactions with law enforcement to the board of directors, as this would be the most appropriate way to escalate the information without compromising the confidentiality of the STR or the ongoing investigation. Providing a copy of the STR or the letter from law enforcement could expose the bank to legal risks or jeopardize the investigation. Informing the regulator to bring it up with the board would not be sufficient, as the compliance officer has the responsibility to report directly to the board on significant compliance issues.
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