SIE Exam Dumps : Securities Industry Essentials Exam (SIE)

Step by Step Explanation:

Suspicious Activity: The use of multiple money orders, lack of investment activity, and request to wire funds to another firm raise red flags for potential money laundering.

FINRA Rules: The RR should escalate the issue by reporting internally and potentially filing a Suspicious Activity Report (SAR).

Incorrect Options:

A: Denying the request without investigation may violate customer instructions.

B: Freezing the account requires a valid legal or regulatory basis.

D: Processing the request without investigation could facilitate illegal activity.

FINRA Anti-Money Laundering (AML) Guidance: FINRA AML Rules.

Treasury securities are among the most liquid investments, as they are backed by the U.S. government and trade actively in large volumes.

A is correct because Treasuries are highly liquid, making them easy to buy and sell.

B is incorrect because most Treasury securities are not callable.

C is incorrect because FDIC insurance applies to bank deposits, not Treasuries.

D is incorrect because U.S. government securities have negligible default risk.

The correct answer is A (No filing required) based on the facts provided. A Currency Transaction Report (CTR) is generally triggered by currency transactions (cash) over the applicable threshold within a single business day. In this scenario, the customer deposited a cashier’s check and a money order, which are monetary instruments, not “currency” (cash). Therefore, even though the combined amount is $10,500, the deposits described are not cash deposits, so this does not automatically require a CTR.

A Suspicious Activity Report (SAR) is required when activity is suspicious and meets reporting criteria—such as transactions that appear designed to evade reporting requirements, have no apparent lawful purpose, involve potential money laundering, or otherwise raise red flags. Here, the amounts and instruments alone—$8,000 cashier’s check and $2,500 money order deposited the same day—do not necessarily indicate suspicious activity. Without additional facts (e.g., patterns of structuring, inconsistent customer profile, unusual source of funds, evasive behavior, or other AML red flags), the firm is not required to file a SAR solely on this activity.

Form W-9 is used to request a taxpayer identification number and certification for certain tax-reporting purposes, but it is not a standard “required filing” triggered by these deposits as described.

The SIE tests the ability to distinguish between currency-based reporting (CTR) and suspicion-based reporting (SAR), and to recognize that not every large or same-day deposit is automatically reportable without meeting the specific rule trigger.