On October 25, 2016, the Financial Crimes Enforcement Network (FinCEN) issued an advisory to financial institutions, advising them that they must report cyber events via Suspicious Activity Reports (SARs) to fulfill their regulatory obligations under the Bank Secrecy Act (BSA).
The FinCEN advisory detailed what it considers to be a cyber event, defining it as “an attempt to compromise or gain unauthorized electronic access to electronic systems, services, resources, or information.” The agency outlined the regulatory expectations of financial institutions in regard to cyber events and the BSA:
“A financial institution is required to report a suspicious transaction conducted or attempted by, at, or through the institution that involves or aggregates to $5,000 or more in funds or other assets. If a financial institution knows, suspects, or has reason to suspect that a cyber-event was intended, in whole or in part, to conduct, facilitate, or affect a transaction or a series of transactions, it should be considered part of an attempt to conduct a suspicious transaction or series of transactions.”
The advisory stated that in determining whether a cyber event should be reported, financial institutions should consider the nature of the event as well as the systems and information that were the target of the event.
In addition, the agency noted that a cyber event could trigger SARs filing obligations to other financial regulatory agencies, including the Office of the Comptroller of the Currency and the Board of Governors of the Federal Reserve System.
The FinCEN advisory also encouraged financial institutions “to report egregious, significant, or damaging cyber-events and cyber-enabled crime when such events and crime do not otherwise require the filing of a SAR.”
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