What is the purpose of filing a SAR?

• A. To document internal control failures
• B. To authorize transactions
• C. To punish customers
• D. To alert regulators to possible criminal actions, including money laundering

Answer: (D)

Filing a Suspicious Activity Report is about signaling to regulators that something in a customer’s activity might indicate criminal behavior, such as money laundering. It provides regulators with leads and documentation for investigation and potential enforcement actions. This isn’t used to document internal control failures, authorize transactions, or punish customers directly. The report is confidential and directed to law enforcement or regulatory authorities, helping them detect and disrupt illicit financial activity and spot broader patterns rather than taking immediate action against a specific customer.