SARS (Severe Acute Respiratory Syndrome) is a virulent disease. SARS (Suspicious Activity Reports) can also be a cure for legal unemployment, underemployment, or just plain lousy employment. Here's how.
What are SARs?
A Suspicious Activity Report (or SAR) is a report regarding suspicious or potentially suspicious activity, filed with the Financial Crimes Enforcement Network (FinCEN), a rather obscure agency of the U.S. Treasury Department. SARs are required by the Bank Secrecy Act, as amended, and its implementing regulations.
The purpose of SARs is to report known or suspected violations of law or suspicious activity observed by financial institutions subject to Bank Secrecy Act regulations. SARs often lead law enforcement organizations to launch financial fraud, money laundering, or terrorist financing investigations, as well as other criminal cases. SARs filings also enable FinCEN to identify emerging financial crimes trends and behavior.
Many diverse financial industries must file SARs, including depository institutions (banks, S&Ls, bank holding companies, credit unions, non-bank subsidiaries of bank holding companies, U.S. branches and agencies of foreign banks, and Edge and Agreement corporations); money services businesses such as check cashing outfits and issuers, sellers and redeemers of money orders and travelers checks; securities firms; the futures industry; casinos; currency dealers and exchangers; and insurance companies. A proposal is in the works to add mutual fund operators to this list. A unique SARs form is specifically designed for each type of financial institutions
FinCEN requires a SARs report to be filed whenever the financial institution suspects: insider abuse by an employee; violations of law aggregating over $5,000 or more where a subject can be identified; violations of law aggregating over $25,000 or more regardless of a potential subject; transactions aggregating $5,000 or more that involve potential money laundering or violations of the Bank Secrecy Act; computer intrusion; or when a financial institution knows that a customer is operating as an unlicensed money services business. Many financial institutions file thousands of SARs each year. SARs are confidential.
Penalties for non-compliance with the SARs filing requirement are severe. They include both corporate and individual employee sanctions, i.e., large fines, imprisonment, regulatory restrictions, and loss of banking charter.
How SARs Create Legal Jobs
Since SARs lead to investigations and prosecutions by federal, state and local law enforcement, they naturally involve attorneys representing government, financial institutions, corporations, and individuals who are the subject of a SARs report.
In addition, the trends and patterns reported by FinCEN often prompt financial institutions and law firms to bolster their legal hiring in anticipation of more vigorous enforcement activity.
Also, the more SARs reports, the more reliance by the reporting entity on attorneys to investigate the suspicious activity and draft and review the SARs report prior to filing. Moreover, since the filing requirements include very short filing deadlines, attorneys get involved in the process early and often.
These often dramatic increases in SARs filings and valuable information on their origins can be a solid indicator of near-term legal hiring activity, intelligence that you can use to frame your job search campaign.
The Latest SARs Trends and Patterns
FinCEN released the latest edition of its SAR Activity Review – By the Numbers on January 22, 2010. The report covers the first six months of 2009 and indicates the following
Suspected check fraud (including travelers' checks and counterfeit checks) increased significantly in 2009 in every industry required to file SARs. Depository institution check fraud SARs were up 19 percent; counterfeit check SARs increased 36 percent; suspected travelers' check fraud zoomed up 76 percent; casino check fraud reports were up18 percent; and securities and futures industry check fraud increased by 19 percent.
Securities and futures industry SARs filings increased 29 percent over 2008.
Mail fraud filings increased by 52 percent, and wire fraud was up 56 percent. Foreign currency futures fraud and foreign currencies fraud reports skyrocketed up 2,600 percent and 300 percent, respectively.
Suspected mortgage loan fraud rose just one percent from the corresponding period in 2008, but remains at a historically high level following six consecutive years of double-digit growth.
FinCEN also recently released a separate report on insurance industry suspicious activity reporting (complete only through April 2008), indicating that filings almost doubled from the prior year, with most of the filing activity emanating from New York, California, New Jersey, Florida and Texas.
You can use this information to target your job search to those areas of most interest to you.