Tag: AML

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FinCEN Looks to Financial Institutions to File SARs Regarding Cyber-Events
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Certain Compliance Risks in Marketplace/Peer-to-Peer/Online Lending

FinCEN Looks to Financial Institutions to File SARs Regarding Cyber-Events

By Mark A. Rush, Stanley V. Ragalevsky, Rebecca H. Laird, and Samuel P. Reger

On October 25, 2016, the Financial Crimes Enforcement Network (“FinCEN”) issued an advisory (the “Advisory”) explaining the obligations a “financial institution” might have under the Bank Secrecy Act (“BSA”) regarding “cyber-events and cyber-enabled crime.” The Advisory states that even if an actual financial transaction did not take place as result of a cyber-event, a financial institution may still be required to file a Suspicious Activity Report (“SAR”) in certain circumstances. Because of this, a covered financial institution should reconsider its obligations under the BSA after a cyber-event.

To read the full alert, click here.

Certain Compliance Risks in Marketplace/Peer-to-Peer/Online Lending

The tragic terrorist shootings in San Bernardino on December 2, 2015 shed light on serious risks associated with online marketplace lending. The attackers obtained $28,500 from an online marketplace lender under a pretext, but then allegedly used the funds to reimburse their arms dealer. This apparent link between the money lent and the mass murders led public officials to re-examine the risks associated with this new and increasingly popular method of lending.

Online marketplace lending represents a chance for investors to realize greater returns and for borrowers to refinance expensive debt and pay less interest, as technology and peer-to-peer matching/evaluation greatly reduces the overhead of the business model. Given both the widespread interest in and the potential for the misuse of such online lending platforms, federal and state lawmakers and regulators are increasing scrutiny of the industry.

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