In 2019, the CFTC issued an alert regarding violations of the Bank Secrecy Act and failures in AML and SAR Filing Programs.
The Bank Secrecy Act (BSA), established in 1970, mandates banks to report deposits over $10,000 to regulators. Under FinCEN’s regulations, the BSA seeks to increase transparency for large transactions and illuminate any illicit activity. It specifically involves Future Commission Merchants (FCMs) and Introducing Brokers (IBs). A major component of BSA is the Anti-Money Laundering Act (AMLA) which aims to combat money laundering and terrorist financing.
BSA Requirements
- Enacting and enforcing an anti-money laundering (AML) written program.
- Enacting “know your customer” rules under the customer identification program (CIP).
- Filing Suspicious Activity Reports (SARs).
- Filing currency transaction reports (CTR).
Types of misconduct in business entities
- Inadequate supervision of the handling of accounts by officers and employees.
- Failure to shield customers and markets from fraud.
- Failure to implement a proper CIP.
- Failure to file SARs and CTRs.
Blowing the Whistle on Violations of the Bank Secrecy Act
- Individuals may report the violation to the CFTC by filing a Form TCR (Tip, Complaint, Referral)
- If you know of any violations of the BSA (including proper AML and SAR filing programs) and have high-quality, original information that can lead to enforcement action of more than $1 million in monetary sanctions, you may be eligible for 10%-30% of the rewards from the CFTC or the SEC Whistleblower Program.
- This program also ensures confidentiality and anti-retaliation protections.
Whistleblowers seeking legal advice may contact Kohn, Kohn & Colapinto for a consultation.
