The recommended way for a FI to respond to a request from a law enforcement agency is to:
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A. B. C. D.D
The recommended way for a financial institution (FI) to respond to a request from a law enforcement agency is to have an audit trail system to produce requested documentation, which is Option B. This response is recommended because it ensures that the FI complies with the request without violating any legal or ethical standards.
Option A, handing over documents protected by attorney-client privilege, is not recommended because doing so may violate the FI's duty to protect client confidentiality. Attorney-client privilege protects confidential communications between an attorney and their client, and such communication should not be disclosed to third parties without the client's permission.
Option C, freezing the identified account immediately, may not be necessary in all cases and could create unnecessary hardship for the customer if the request from the law enforcement agency is unfounded or lacks proper legal justification. Freezing an account should be done only in cases where it is legally required, and after conducting due diligence to ensure that the request is legitimate.
Option D, training all staff to enable them to respond to subpoenas, is a good practice for any FI, but it is not an adequate response to a request from a law enforcement agency. Compliance with a law enforcement request requires a more formalized process that involves the collection, review, and production of specific documents or information.
In summary, having an audit trail system to produce requested documentation is the recommended way for a financial institution to respond to a request from a law enforcement agency. This approach ensures that the FI complies with the request while protecting client confidentiality and avoiding unnecessary harm to the customer.