Discovery OF SARS

Financial institutions that receive discovery requests seeking the disclosure of information or documents regarding suspicious activity reports (“SARs”) should be mindful of regulations prohibiting the disclosure of SARs.

Simply stated, “SARs are not discoverable material.” Freedman & Gersten, LLP v. Bank of America, N.A., 2010 WL 5139874, 3 (D.N.J. 2010). 12 C.F .R. 21.11(k) explicitly bars the pretrial production of this documentation:

(k) Confidentiality of SARs. SARs are confidential. Any national bank or person subpoenaed or otherwise requested to disclose a SAR or the information contained in a SAR shall decline to produce the SAR or to provide any information that would disclose that a SAR has been prepared or filed, citing this section, applicable law (e.g. 31 U.S.C. 5318(g)), or both, and shall notify the Office of the Comptroller of the Currency.

Accordingly, 12 C.F.R. 21.11(k) prohibits the disclosure of SARs, and any information that would reveal the existence of a SAR. Therefore, when responding to discovery requests, financial institutions should consider whether the requests seek the disclosure of a SAR, and be careful that any discovery responses do not reveal the existence of a SAR.

Posted by: Michele Lorbieski Anderson

Categories: Bankruptcy & Banking Law