Session 6

A financial institution receives a regulatory finding that indicates gaps in its AML program. What should the institution do first?

• Inform the media about the gaps

• Escalate the findings to senior management and implement remedial measures

• Ignore the findings unless a formal investigation is initiated

• Temporarily shut down operations

A customer deposits $25,000 in cash over three days and sends $30,000 in wire transfers within a week. What should the institution investigate?

• The source of cash deposits

• The beneficiary of the wire transfers

• Both A and B

• Neither, as these are typical transactions

An employee reports suspicious activity involving potential fraud using the company hotline. What is the correct procedure?

• File a Suspicious Transaction Report (STR) immediately

• Retaliate against the employee for making the report

• Investigate the report through compliance and legal departments

• Ignore the report

A financial institution sees a negative news report about a customer linked to illicit activities. What should the compliance analyst do?

• File an STR immediately

• Research additional authoritative sources to validate the claim

• Close the customer’s account without further investigation

• Ignore the report unless contacted by law enforcement

What should a financial institution do upon receiving a government subpoena?

• Notify the customer being investigated

• Comply with the subpoena after review by senior management or counsel

• Refuse to comply unless formally threatened with penalties

• Publicly disclose the details of the subpoena

During a search warrant execution, what is the financial institution’s responsibility?

• Prevent law enforcement from accessing records

• Request a copy of the warrant and monitor the inventory of items seized

• Provide law enforcement access to all records, including attorney-client documents

• Allow agents unrestricted access without verifying the warrant

What factors should be considered when deciding to file an STR?

• The regulatory timeline and aggravating factors of the case

• The personal reputation of the customer

• Only the internal policy requirements

• The tax implications for the customer

What is the primary purpose of a Mutual Legal Assistance Treaty (MLAT)?

• To freeze a customer’s assets internationally

• To facilitate cross-border law enforcement cooperation in criminal cases

• To protect banking secrecy

• To create bilateral trade agreements

When deciding to close an account after an investigation, what should be considered?

• The legal basis and seriousness of the underlying conduct

• The profitability of the account

• Whether the customer is politically exposed

• The customer’s complaint about service quality

What triggers a law enforcement investigation into money laundering?

• STRs, tips from sources, and evidence from other cases

• Random audits by regulators

• Anonymous complaints from competitors

• Media reports without verification