Question 5

A financial institution should perform a transaction review and respond fully to the subpoena.

When a financial institution receives a subpoena for information on a client's account, it is essential to conduct a thorough transaction review before responding to the subpoena in order to comply with legal requirements and provide accurate information.

A) adjust the client's risk score and close the case.

This option is incorrect because simply adjusting the client's risk score and closing the case does not address the legal obligation to respond to the subpoena. The financial institution must review the transactions and provide the requested information rather than taking actions that may not be relevant to the subpoena.

B) file a suspicious activity report (SAR), including the receipt of the subpoena in the SAR narrative.

While filing a SAR may be necessary in some scenarios involving suspicious activities, this option does not directly address the requirement to respond to the subpoena. The institution must focus on reviewing the account and providing the information requested rather than filing a report that may not be applicable in this context.

C) close the client's account by informing the client of the subpoena.

Closing the client's account in response to a subpoena is not appropriate, as it does not fulfill the legal requirement to provide the requested information. The institution should instead perform the necessary review of transactions and respond to the subpoena rather than taking drastic measures that could jeopardize compliance.

D) perform a transaction review and respond fully to the subpoena.

This option is correct because it emphasizes the importance of conducting a detailed transaction review to gather relevant information before responding to the subpoena. This ensures that the financial institution complies with legal obligations while safeguarding the integrity of the client's account information.

Conclusion

The correct answer is option D, as it encapsulates the necessary steps a financial institution must take when responding to a subpoena for client information. Other options either fail to address the legal obligations or suggest actions that could lead to non-compliance with regulatory requirements. Therefore, performing a transaction review and responding fully is the appropriate course of action in this scenario.