CAMS · Question #557
Suspicious activity triggered a suspicious transaction report filing on a company that holds an account at a large commercial bank. Investigations revealed that a member of the bank's Board of…
The correct answer is A. Include a detailed presentation of this case in the Board report. The compliance officer should report the suspicious activity to the Board of Directors, as they are ultimately responsible for the bank's compliance program and oversight. The Board should be informed of the potential conflict of interest and reputational risk involved in the…
Question
Suspicious activity triggered a suspicious transaction report filing on a company that holds an account at a large commercial bank. Investigations revealed that a member of the bank's Board of Directors is the major shareholder of the company. Further review revealed the bank had no reasonable explanation for the activity, but could not confirm if criminal activity occurred. Which of the following is the next best course of action for the compliance officer?
Options
- AInclude a detailed presentation of this case in the Board report.
- BPrevent the suspicious transaction report from government filing.
- CAsk the Board member to explain the transaction.
- DMaintain standard summary statistical reporting to the Board.
How the community answered
(39 responses)- A82% (32)
- B5% (2)
- C3% (1)
- D10% (4)
Explanation
The compliance officer should report the suspicious activity to the Board of Directors, as they are ultimately responsible for the bank's compliance program and oversight. The Board should be informed of the potential conflict of interest and reputational risk involved in the case, as well as the steps taken by the compliance officer to investigate and file the suspicious transaction report. The compliance officer should not prevent the filing of the report, as this would violate the legal obligations of the bank and expose it to regulatory sanctions and penalties. The compliance officer should not ask the Board member to explain the transaction, as this could compromise the integrity and independence of the investigation and the reporting process. The compliance officer should not maintain standard summary statistical reporting to the Board, as this would not adequately address the seriousness and complexity of the case.
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