Firms Settle SEC Charges for Deficient SAR Reports

Three broker-dealers separately settled SEC charges for failing to include required information in suspicious activity reports ("SARs").

According to the Orders, (see Order 1, Order 2 and Order 3), the firms filed SARs that did not contain the information in the SAR narrative as required by FinCEN. The SEC found that the firms' "filed SARs omitted facts identifying the 'five essential elements'—namely the 'who, what, when, where, and why' of the suspicious activity being reported—from the SAR narratives." The SEC said, "these facts were necessary to make the SAR narratives effective tools and fulfill their intended purpose."

The SEC found that each firm violated SEA Section 17(a) ("Records and Reports") and Rule 17a-8 ("Financial recordkeeping and reporting of currency and foreign transactions") thereunder.

To settle the charges, the firms agreed to (i) cease and desist from committing further violations; (ii) censures; and (iii) civil money penalties in the respective amounts of $75,000; $75,000; and $125,000.