Type: Articles Published

In recent years, plaintiffs have increasingly sought discovery from banks relating to their anti-money laundering and Bank Secrecy Act programs, particularly in cases involving alleged customer misconduct. This development, which parallels increased focus by regulators on AML and BSA compliance, means that banks must take even greater care to avoid inadvertent disclosures of material protected by suspicious activity report confidentiality. This task is complicated by the fact that the line between privileged SAR material and non-privileged material, particularly material that is not a SAR and does not reference a SAR but is also not an account statement or other transactional document, is not always clear.

A federal appellate court underscored this point in 2015 when it referred to the scope of the SAR privilege as an “evolving area of the law.” In the absence of further regulatory guidance, the scope of the SAR privilege may continue to evolve in court decisions, but two points merit mention from recent decisions: first, there appears to be a consensus that material reflecting an evaluation or analysis of whether to file a SAR is privileged; and second, courts are divided as to whether material generated as part of an investigation is categorically privileged.

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