A financial institution employee notices a co-worker's lifestyle appears extravagant compared to income. What action should she take?

• A. File a suspicious activity report (SAR)
• B. Confront the co-worker privately
• C. Document and discuss with HR only
• D. Ignore the discrepancy

Answer: (A)

When a red flag appears in money-laundering risk—such as a coworker whose lifestyle seems extravagant beyond what their income would support—the proper response is to escalate through the institution’s compliance process and, if warranted, file a Suspicious Activity Report. This channel is designed for reporting potential financial crimes to the regulator while keeping the matter confidential. Confronting the coworker or discussing it with HR bypasses proper investigative procedures and can jeopardize evidence or violate policy. Ignoring the discrepancy also risks allowing potential illegal activity to go unchecked. By documenting the observed concerns and routing them to the compliance team, the institution can assess whether the behavior indicates illicit activity and determine if a SAR should be filed.