Capital Briefs: Suspicious Activity Filings-the Fed Urges Caution

To avoid being sued by customers over suspicious activity report, or SAR, filings, banks should closely follow the anti- laundering rules, the Federal Reserve Board warned in a letter being sent to all holding companies.

Several recent court cases have found that banks that deviate even slightly from the rules may lose their immunity from invasion-of-privacy suits, the Fed said.

Institutions must make their own assessments of whether a suspicious activity occurred, not rely solely on a request for information from a law enforcement agency, the Fed said.