When Can Law Enforcement Access Financial Records? | CAMS Exam Question Answer

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Under the circumstances described in the question, there are two situations in which law enforcement may be given access to a financial institution customer's financial records:

1. If the person is named in a suspicious transaction report: Financial institutions are required to file suspicious transaction reports (STRs) with the appropriate regulatory authorities when they detect transactions that appear to be suspicious or related to money laundering. These reports contain information about the transaction and the individuals involved. If a person is named in such a report, it raises concerns about their involvement in illicit activities, and law enforcement may be granted access to the customer's financial records to further investigate the suspicious activity and gather evidence.

2. If law enforcement serves a legal summons or subpoena: Law enforcement agencies have the authority to issue legal summons or subpoenas, which are court orders requiring the recipient to produce certain information or documents. If law enforcement serves a summons or subpoena to a financial institution, requesting access to a customer's financial records as part of an ongoing investigation related to potential money laundering or other criminal activities, the financial institution is legally obligated to comply with the court order and provide the requested information.

It is important to note that the other two options mentioned in the question are not valid circumstances for granting law enforcement access to a customer's financial records:

• If the investigation of a customer is made public in the media: The fact that an investigation of a customer becomes public in the media does not automatically grant law enforcement access to the customer's financial records. Media exposure may generate public interest or awareness about the investigation, but it does not inherently authorize law enforcement to access confidential financial records without following proper legal procedures.

• If law enforcement has circumstantial evidence to suspect money laundering: Circumstantial evidence alone is generally not sufficient to grant law enforcement access to a customer's financial records. While circumstantial evidence may contribute to the overall investigation, law enforcement still needs to follow appropriate legal channels, such as obtaining a legal summons or subpoena, to access and examine the customer's financial records.

In summary, the two circumstances that may allow law enforcement access to a financial institution customer's financial records are when the person is named in a suspicious transaction report and when law enforcement serves a legal summons or subpoena.