U.S. Sec. & Exch. Comm'n v. Alpine Sec. Corp. (354 F. Supp. 3d 396, 2018)

DENISE COTE, United States District Judge

Procedural History ...405

Background ...406

I. The Low-Priced Securities Market ...406

II. Alpine's Business ...408

III. 2011-2012 FINRA Examination ...408

IV. Alpine's Improvements of its AML Program and SAR Filing Program ...409

V. 2014 OCIE Examination ...410

Discussion ...410

I. Regulatory Framework ...411

II. General Arguments ...416

III. Admissibility of Summary Tables ...419

IV. Deficient Narratives ...422

A. Mandatory Filing ...422

B. Red Flags Omitted From SAR Narratives ...425

1. Related Litigation ...426

a. Three Customers ...428

b. Ten SARs ...430

c. Summary ...431

2. Shell Companies or Derogatory History of Stock ...431

3. Stock Promotion ...433

4. Unverified Issuers ...435

5. Low Trading Volume ...436

6. Foreign Involvement ...438

7. Five Essential Elements ...439

V. Deposit-and-Liquidation Patterns ...440

VI. Late-Filed SARs ...443

VII. Failure to Maintain Support Files ...443 Conclusion ...445

Plaintiff United States Securities and Exchange Commission ("SEC") has sued clearing broker Alpine Securities Corporation ("Alpine"), alleging that between the years 2011 and 2015 Alpine repeatedly filed deficient suspicious activity reports ("SARs") and failed altogether to file other SARs and to maintain support files for SARs when required by law to do so. The SEC asserts that this conduct violated 17 C.F.R. § 240.17a-8 ("Rule 17a-8"), which obligates a broker-dealer to comply with certain regulations promulgated under the Bank Secrecy Act ("BSA"), including 31 C.F.R. § 1023.320 (" Section 1023.320"), which dictates when a broker-dealer must file SARs.

The SEC has moved for summary judgment as to liability on thousands of violations of Rule 17a-8. For the reasons that follow, the SEC's motion is granted in part.

Procedural History

The SEC filed this action on June 5, 2017. Following an unsuccessful effort to dismiss the action for lack of personal jurisdiction and improper venue, Alpine answered the complaint on September 29, 2017. It filed an amended answer on October 27.

As invited by the Court, the parties made preliminary summary judgment motions to articulate the legal standards that govern the SEC's claims and Alpine's defenses. The SEC moved for partial summary judgment on December 6, 2017, submitting thirty-six SARs under seal as examples of four categories of purported Rule 17a-8 violations. Alpine cross-moved for summary judgment and for judgment on the pleadings on January 19, 2018. Alpine declined the opportunity to submit additional SARs for review in connection with the SEC's motion. Alpine's motions principally argued that the SEC does not have jurisdiction to bring this action and that the SEC's complaint was deficient for failing to plead that Alpine acted with wrongful intent. An Opinion of March 30, 2018 (the " March Opinion") denied Alpine's motions and granted in part the SEC's motion. See SEC v. Alpine Sec. Corp., 308 F.Supp.3d 775 (S.D.N.Y. 2018).

On June 22, 2018, Alpine and its affiliate, Scottsdale Capital Advisors ("SCA"), filed an action in the United States District Court for the District of Utah (the "Utah Action"). See Alpine Sec. Corp. v. SEC, No. 18cv504(CW) (D. Utah filed June 22, 2018). The Utah Action sought, inter alia, to enjoin the SEC from pursuing this action before this Court. The SEC moved to enjoin the Utah Action on July 3. That motion was granted on July 11. See SEC v. Alpine Sec. Corp., No. 17cv4179(DLC), 2018 WL 3377152 (S.D.N.Y. July 11, 2018). Alpine's appeal of the July 11 injunction is pending before the Court of Appeals for the Second Circuit. See SEC v. Alpine Sec. Corp., No. 18-2045 (2d Cir. filed July 12, 2018).

Following the conclusion of discovery, the SEC filed this summary judgment motion on July 13. The motion became fully submitted on September 14.

Background

Much of the relevant factual and regulatory background is recited in the March Opinion. Familiarity with the March Opinion is assumed.

I. The Low-Priced Securities Market

The SAR transactions at issue involve penny stocks and microcap stocks. Penny stocks are securities that trade at less than $ 5 per share. Microcap stocks are defined based on the market capitalization of the issuer; these stocks tend to have a share price of less than one cent. Penny stocks and microcap stocks are primarily traded in "over-the-counter" markets. See March Opinion, 308 F.Supp.3d at 781 & n.1.

The markets for these low-priced securities ("LPS") have long been the subject of congressional and regulatory scrutiny due to the unique characteristics of those markets. In 1990, Congress enacted the Penny Stock Reform Act of 1990. See Pub. L. No. 101-429, sec. 501, 104 Stat. 931, 951. That Act includes congressional findings that "[u]nscrupulous market practices and market participants have pervaded the 'penny stock' market with an overwhelming amount of fraud and abuse."Id. sec. 502(4), 104 Stat. at 951. Congress concluded that one key problem with the penny stock market was "a serious lack of adequate information concerning price and volume of penny stock transactions, the nature of th[e] market, and the specific securities in which [individuals] are investing." Id. sec. 502(6), 104 Stat. at 951. In addition, Congress stated that "[c]urrent practices do not adequately regulate the role of 'promoters' and 'consultants' in the penny stock market," and that individuals "banned from the securities markets" "ended up in promoter and consultant roles, contributing substantially to fraudulent and abusive schemes." Id. sec. 502(7), 104 Stat. at 951. Congress also found that "shell corporations ... are used to facilitate market manipulation schemes" in the penny stock markets. Id. sec. 502(8), 104 Stat. at 951.

The SEC has promulgated rules pursuant to the Penny Stock Reform Act. It revised those rules in 2005 in order to better combat "fraudulent sales practices" and "the diversion of substantial capital to unscrupulous promoters and broker-dealers" in the LPS markets. See SEC, Amendments to the Penny Stock Rules, SEC Release No. 49037, 2004 WL 51685, at *3 (Jan. 8, 2004).

Financial regulators frequently warn investors about the risks of fraud connected to investments in LPS. The SEC, for instance, has observed that "information about microcap companies can be extremely difficult to find, making them more vulnerable to investment fraud schemes and making it less likely that quoted prices in the market will be based on full and complete information about the company." SEC, Microcap Stock. Similarly, FINRA

has warned investors "about the dangers of penny stocks," focusing on the lack of publicly available or verifiable information about issuers and the possibility that the issuer may be a shell company. See FINRA, Beware Dormant Shell Companies.

The SEC has explained in an administrative decision that "[p]enny stocks present risks of trading abuses due to the lack of publicly available information about the penny stock market in general and the price and trading volume of particular penny stocks." In re Bloomfield, SEC Release No. 9553, 2014 WL 768828, at *2 (SEC Feb. 27, 2014), aff'd, 649 F. App'x 546 (9th Cir. 2016). In that decision, the SEC noted that penny stocks are vulnerable to pump-and-dump schemes that manipulate a stock price in order to enrich stock promoters. Id. at *3. The SEC added that

[m]oney laundering activities can also be facilitated through the trading of penny stocks. Some money laundering red flags include: a customer who has a questionable background or is the subject of news reports indicating possible criminal, civil, or regulatory violations; multiple accounts in the names of family members or corporate entities for no apparent business or other purpose; wire transfers to or from countries identified as money laundering risks or tax havens; and excessive journal entries between unrelated accounts.

Id.

As noted, a frequent tool of market manipulation is the use of shell companies. See FINRA, Dormant Shell Companies; SAR Activity Review, Issue 1, at 11. FinCEN has warned that shell companies "are an attractive vehicle for those seeking to launder money or conduct illicit activity" with significant potential for "abuse" in the form of money laundering or pump-and-dump schemes. FinCEN Domestic Shell Company Report at 2, 4. FinCEN has explained that shell companies are "common tools for money laundering and other financial crimes, primarily because they are easy and inexpensive to form and operate." FinCEN Shell Company Guidance at 2.

Alpine does not dispute these risks of investing in the LPS markets. Alpine points out, however, that these markets provide access to capital for smaller companies.

II. Alpine's Business

Alpine is a clearing broker. Clearing brokers provide clearance and settlement services for introducing brokers. This involves handling the recording of transactions, the exchange of funds, and the delivery of securities after a transaction has been executed. Clearing firms typically maintain records of all trading and issue trade confirmations and statements.

Alpine was founded in 1984. In early 2011, Alpine was acquired by its current owner.

III. 2011-2012 FINRA Examination

Alpine is regulated by FINRA and other regulators. Between March 2, 2011 and January 22, 2012, FINRA conducted a financial, operational, and sales practices examination of Alpine. FINRA conducted an exit meeting with Alpine on July 23, 2012, where it shared its highly critical findings with Alpine. FINRA issued a seven-page report of that examination on September 28, 2012 ("FINRA Report").

The FINRA Report listed ten exceptions to Alpine's practices, five of which have particular relevance to the issues raised in this lawsuit. The FINRA Report discloses that Alpine did not file any SARs for over six months in 2011 -- March 1 through May 10 and August 16 through December 19 -- and found that Alpine was not in compliance with a FINRA SAR reporting rule and two federal reporting regulations, including Section 1023.320. The FINRA Report recited the explanations Alpine provided for its failure to file these SARs, including that its compliance officer had determined that these filings were discretionary and that it was unnecessary to file them. Alpine's chief of operations explained that once he had learned that no SARs had been filed for the period August 16 through December 19, 2011, Alpine filed SARs to reflect certain transactions that had occurred during that period. The FINRA Report found that these filings were all late and should have been filed no later than thirty days after the initial detection of the suspicious activity reported in them. It concluded that Alpine had "failed to establish and enforce procedures reasonably designed to detect and report suspicious activity."

The FINRA Report also determined that the narrative sections of the 823 SARs that Alpine did file during the period March 7, 2011 through January 22, 2012 were "substantively inadequate" and in violation of Section 1023.320(a)(1). It explained that

[t]he narratives for all SARs reviewed were substantively inadequate as they failed to fully describe why the activity was suspicious. For the SARs reviewed, the narrative just described isolated events of activity without any detail or support of why the firm actually considered the activity to be suspicious and therefore failing to justify at the basic core the legitimacy of the SAR filing.

The FINRA Report recited the "two basic formats or templates" that Alpine had used in these SARs, "neither of which were substantively adequate as they failed to fully describe why the activity was suspicious." As quoted in the FINRA Report, the first boilerplate, barebones narrative read:

On or around December 09, 2011 ABC LLC deposited a large quantity (40,000,000 shares) of XYZ Corp, a low-priced ($ 0.0001/share) security.

The second read:

ABC Inc. is a client of ACAP Financial, a firm for which Alpine Securities provides securities clearing services. Due to the activity within this account, it has been placed on a Heightened Supervisory list. It is policy of Alpine to file a SARs [sic] related to each deposit of securities into accounts of this nature. On or around 12/23/2011, ABC Inc. deposited a large quantity (5,097,312) of XYZ Corp, a low-priced ($ .0045 /share) security. This transaction amounted to approximately $ 22,938.00.

The FINRA Report notes that the first template was used in 559 SARs and the second template was used in 264 SARs.

The FINRA Report also criticized Alpine for failing to review requests from FinCEN for information, and for the inadequacies in its AML program, including the program's failure to detect and report suspicious activity. As disclosed in the Report, Alpine had failed to enforce its own AML procedures, including the requirement that it file a SAR within thirty days of becoming aware of a suspicious transaction.

In response to the FINRA examination, Alpine filed 251 SARs between December 2011 and May 2012 for transactions that had occurred between August 17, 2011 and February 3, 2012, and for which it had previously filed no SARs. Alpine explains in opposition to this motion for summary judgment that it filed these SARs only because FINRA informed Alpine that it expected to see SARs filed on all transactions involving large deposits of LPS. The SEC contends that Alpine violated Rule 17a-8 by failing to file these SARs within the thirty-day period imposed by Section 1023.320(b)(3). These SARs will be referred to as the Late-Filed SARs.

IV. Alpine's Improvements of its AML Program and SAR Filing Program

In response to this motion for summary judgment, Alpine freely acknowledges that before the change in ownership in 2011, Alpine had had only limited compliance staff. Alpine's current owners hired more compliance personnel in 2011 and 2012. Beginning in the Fall of 2012, Alpine arranged for an annual audit of its AML program. Also in 2012, Alpine created standard operating procedures for compliance with AML regulations. Alpine has submitted three versions of its AML procedures, dated April 11, 2013, August 29, 2014, and October 1, 2015.

The SEC's motion for summary judgment is premised in part on 1,593 SARs that Alpine filed and which the SEC contends contain deficiencies in their narratives. Of those 1,593 SARs, approximately two-thirds were filed before September 28, 2012, when Alpine received the FINRA Report.

The following is the narrative section of SAR 1763, which is one of the post-FINRA Report SARs at issue here. It was filed in September 2013, approximately one year after the FINRA Report. It reads:

[Customer] is a client of [SCA], a firm for which Alpine Securities provides clearing services. This account is a foreign broker-dealer. This account historically makes deposits of large volumes of low-priced securities. For that reason this transaction may be suspicious in nature. On or around [date, Customer] deposited physical stock certificate(s) representing a large quantity (2,---,--- shares) of [issuer], a low-priced ($ .05/share) security into brokerage account [number.] The brokerage account is maintained through Alpine Securities. This transaction amounted to approximately $ 1--,---.--. The return on the initial investment of $ 2-,---.-- on [date six months before transaction] considering the relatively short time period. [sic]

The SEC contends that this SAR narrative is deficient for failing to disclose (a) basic customer information, (b) that the deposit was significantly disproportionate to the average daily trading volume of the LPS, and (c) that the sub-account holder is foreign.

V. 2014 OCIE Examination

The SEC Office of Compliance Inspections and Examinations ("OCIE") conducted a one-week on-site review of Alpine in July 2014. OCIE reviewed 252 of the over 4,600 SARs filed by Alpine between January 2013 and July 2014, and concluded in a report issued on April 9, 2015 ("OCIE Report") that 50% of those 252 SARs "failed to completely and accurately disclose key information of which [Alpine] was aware at the time of filing." OCIE found that the narrative sections of Alpine's SARs "generally contained 'boilerplate' language." It criticized Alpine for omitting mention of many red flags for suspicious activity, such as a customer's civil, regulatory, or criminal history; foreign involvement with the transactions; concerns about an issuer; stock promotion activity; and that an issuer had been a shell company. In bringing this lawsuit, the SEC relies on the existence of these red flags in Alpine's support files for the SARs Alpine filed.

The OCIE Report found as follows:

All of the information noted above was of critical importance to adequately and accurately describe the nature and extent of the suspicious activity that was the subject of each SAR. And, as evidenced by Alpine's own investigative files, Alpine knew of the omitted information at the time each SAR was filed. By excluding the information described above, Alpine failed to "provide a clear, complete, and concise description of the activity, including what was unusual or irregular that caused suspicion:" and failed to show the degree of care required by FinCEN to complete the narrative. (In fact, we note that the amount and type of actual material information in SARs filed by Alpine is very similar to the sample SAR that FinCEN has identified in its public guidance as being insufficient or incomplete.) This rendered the SARs less valuable to investigators trying to understand the activity and any criminal or administrative implications thereof. As a result, the Firm is in contravention of FinCEN's SAR Rule and Exchange Act Rule l7a-8.

(Footnotes omitted.)

The OCIE Report also noted that Alpine filed SARs on certain customers' deposits of LPS but "[i]nexplicably" failed to file SARs when those customers sold those LPS. The OCIE Report describes Alpine's failures as "recidivist activity" because of FINRA's 2012 findings that Alpine was filing substantively inadequate SARs. It concluded that Alpine's SAR practices "obscured the true nature of the suspicious activity," and that it appeared that Alpine was "intentionally trying to obfuscate or distort the truly suspicious nature of the activity that the Firm is required to report to law enforcement."

Discussion

The SEC seeks summary judgment as to Alpine's liability for several thousand violations of Rule 17a-8. The SEC's motion is largely addressed to four discrete alleged deficiencies in Alpine's compliance between 2011 and 2015 with SAR reporting requirements. For each alleged deficiency, it has submitted a table that identifies hundreds of deficient or missing SARs or missing support files for SARs.

"Summary judgment is appropriate only where there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Jaffer v. Hirji, 887 F.3d 111, 114 (2d Cir. 2018) (citation omitted). "A genuine issue of material fact exists if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Nick's Garage, Inc. v. Progressive Cas. Ins. Co., 875 F.3d 107, 113 (2d Cir. 2017) (citation omitted). "Where the movant has the burden" of proof at trial, "its own submissions in support of the motion must entitle it to judgment as a matter of law." Albee Tomato, Inc. v. A.B. Shalom Produce Corp., 155 F.3d 612, 618 (2d Cir. 1998)

When the moving party has asserted facts showing that it is entitled to judgment, the opposing party must "cit[e] to particular parts of materials in the record" or "show[ ] that the materials cited [by the movant] do not establish the absence ... of a genuine dispute" in order to show that a material fact is genuinely disputed. Fed. R. Civ. P. 56(c)(1). "A party may not rely on mere speculation or conjecture as to the true nature of the facts to overcome a motion for summary judgment," as "[m]ere conclusory allegations or denials cannot by themselves create a genuine issue of material fact where none would otherwise exist." Hicks v. Baines, 593 F.3d 159, 166 (2d Cir. 2010) (citation omitted). Only disputes over "facts that might affect the outcome of the suit under the governing law" will properly preclude the entry of summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Summary judgment may be granted if the evidence cited by the nonmovant is "merely colorable or is not significantly probative." Id. at 249, 106 S.Ct. 2505 (citation omitted).

I. Regulatory Framework

This case concerns the interplay of regulations promulgated under two federal statutes: the BSA, 31 U.S.C. § 5311, et seq., first enacted in 1982, and the Securities Exchange Act of 1934 (the "Exchange Act"), 15 U.S.C. § 78a, et seq. The BSA allows the Secretary of the Treasury to "require any financial institution ... to report any suspicious transaction relevant to a possible violation of law or regulation." 31 U.S.C. § 5318(g)(1). The Secretary has delegated this authority to FinCEN. Pursuant to these delegations, in 2002 the Treasury Department and FinCEN promulgated Section 1023.320. There are similar suspicious activity reporting regulations that apply to other types of financial institutions, such as banks, casinos, and mutual funds. See, e.g., 31 C.F.R. §§ 1020.320 (banks), 1021.320 (casinos), 1024.320 (mutual funds).

Rule 17a-8 was promulgated by the SEC in 1981 under authority delegated to it by Congress in the Exchange Act. See March Opinion, 308 F.Supp.3d at 796. The Rule requires a broker-dealer to "comply with the reporting, recordkeeping and record retention requirements of chapter X of title 31 of the Code of Federal Regulations." 17 C.F.R. § 240.17a-8.

The reporting and record-keeping requirements found in Chapter X of Title 31 of the Code of Federal Regulations and incorporated by Rule 17a-8 include Section 1023.320, which, among other things, requires a broker-dealer to file SARs. Section 1023.320 states in pertinent part:

(1) Every broker or dealer in securities within the United States (for purposes of this section, a "broker-dealer") shall file with FinCEN, to the extent and in the manner required by this section, a report of any suspicious transaction relevant to a possible violation of law or regulation. A broker-dealer may also file with FinCEN a report of any suspicious transaction that it believes is relevant to the possible violation of any law or regulation but whose reporting is not required by this section....

(2) A transaction requires reporting under the terms of this section if it is conducted or attempted by, at, or through a broker-dealer, it involves or aggregates funds or other assets of at least $ 5,000, and the broker-dealer knows, suspects, or has reason to suspect that the transaction (or a pattern of transactions of which the transaction is a part):

(i) Involves funds derived from illegal activity or is intended or conducted in order to hide or disguise funds or assets derived from illegal activity (including, without limitation, the ownership, nature, source, location, or control of such funds or assets) as part of a plan to violate or evade any Federal law or regulation or to avoid any transaction reporting requirement under Federal law or regulation;

(ii) Is designed, whether through structuring or other means, to evade any requirements of this chapter or of any other regulations promulgated under the Bank Secrecy Act;

(iii) Has no business or apparent lawful purpose or is not the sort in which the particular customer would normally be expected to engage, and the broker-dealer knows of no reasonable explanation for the transaction after examining the available facts, including the background and possible purpose of the transaction; or

(iv) Involves use of the broker-dealer to facilitate criminal activity.

31 C.F.R. § 1023.320(a) (emphasis supplied).

The regulation also provides that a SAR must be filed

no later than 30 calendar days after the date of the initial detection by the reporting broker-dealer of facts that may constitute a basis for filing a SAR under this section. If no suspect is identified on the date of such initial detection, a broker-dealer may delay filing a SAR for an additional 30 calendar days to identify a suspect, but in no case shall reporting be delayed more than 60 calendar days after the date of such initial detection.

31 C.F.R. § 1023.320(b)(3) (emphasis supplied).

In addition, a broker-dealer is required to retain support files for SARs for five years, as follows:

Retention of records. A broker-dealer shall maintain a copy of any SAR filed and the original or business record equivalent of any supporting documentation for a period of five years from the date of filing the SAR. Supporting documentation shall be identified as such and maintained by the broker-dealer, and shall be deemed to have been filed with the SAR. A broker-dealer shall make all supporting documentation available to FinCEN or any Federal, State, or local law enforcement agency, or any Federal regulatory authority that examines the broker-dealer for compliance with the Bank Secrecy Act, upon request....

31 C.F.R. § 1023.320(d) (emphasis supplied).

SARs are currently submitted to FinCEN via an electronic SAR Form. Part I of the Form is titled "Subject Information" and requires a filer to provide identifying information about the subject of the SAR. 2002 SAR Form at 1. The subject of a SAR is defined in guidance as the individuals or entities "involved in the suspicious activity." SAR Narrative Guidance at 3. "If more than one individual or business is involved in the suspicious activity," a filer must "identify all suspects and any known relationships amongst them in the Narrative Section." Id.; see also 2012 SAR Instructions at 88 (directing filers to provide subject information for "each known subject involved in the suspicious activity").

Part II of the SAR Form requires the filer to identify the suspicious activity being reported. A filer must provide the date or date range of suspicious activity and the dollar amount involved. In addition, there is a list of financial instruments, such as "Bonds/Notes," "Stocks," and "Other securities." 2002 SAR Form at 1. A filer is directed to check all that apply to the transaction. A filer must also check boxes identifying the type of suspicious activity, which includes "Commodity futures/options fraud," "Insider trading," "Market manipulation," "Money laundering/structuring," "Prearranged or other non-competitive trading," "Securities fraud," "Wash or other fictitious trading," and "Wire fraud." Id. This list also includes an option to check "Other," with an instruction to "[d]escribe" the activity in the narrative portion of the SAR. Id. A FinCEN instructional document for this Form directs filers to "[p]rovide a brief explanation in [the SAR narrative] of why each box is checked." 2002 Form Instructions at 3.

The SAR Form also contains directions for SAR filers about how to complete the narrative portion of the SAR. The instructions state that the narrative

section of the report is critical. The care with which it is completed may determine whether or not the described activity and its possible criminal nature are clearly understood by investigators. Provide a clear, complete and chronological description ... of the activity, including what is unusual, irregular or suspicious about the transaction(s), using the checklist below as a guide.

(Emphasis in original.) The checklist has twenty-two items, each addressed to a specific type of information. The following items are particularly relevant to the SEC's motion for summary judgment:

h. Indicate whether the suspicious activity is an isolated incident or relates to another transaction.

i. Indicate whether there is any related litigation. If so, specify the name of the litigation and the court where the action is pending.

...

k. Indicate whether any information has been excluded from this report; if so, state reasons.

l. Indicate whether U.S. or foreign currency and/or U.S. or foreign negotiable instrument(s) were involved. If foreign, provide the amount, name of currency, and country of origin.

...

o. Indicate any additional account number(s), and any foreign bank(s) account number(s) which may be involved.

p. Indicate for a foreign national any available information on subject's passport(s), visa(s), and/or identification card(s). Include date, country, city of issue, issuing authority, and nationality.

q. Describe any suspicious activities that involve transfer of funds to or from a foreign country, or transactions in a foreign currency. Identify the country, sources and destinations of funds.

2002 SAR Form at 3.

FinCEN has issued a number of guidance documents explaining the scope of the SAR reporting duty in the narrative section of the SAR Form. FinCEN guidance interpreting Section 1023.320 is entitled to deference. See March Opinion, 308 F.Supp.3d at 791. That guidance includes the instruction that a SAR narrative should include the who, what, when, why, where, and how of the suspicious activity (the "Five Essential Elements"). See SAR Narrative Guidance at 3-6; SAR Activity Review, Issue 22, at 39-40; 2012 SAR Instructions at 110-12. See generally 308 F.Supp.3d at 791-95. To interpret the scope of Section 1023.320, this Opinion principally relies on the instructions on the 2002 SAR Form, the 2012 SAR Instructions, and the SAR Narrative Guidance issued in 2003. Both the 2002 SAR Form (and its list of instructions) and the 2012 SAR Form were promulgated after FinCEN published a notice in the Federal Register with a draft version of the form and invited public comment. See FinCEN 2002 SAR Form Notice, 67 Fed. Reg. at 50,751 ; FinCEN 2012 SAR Form Notice, 75 Fed. Reg. at 63,545. The 2012 SAR Instructions are similar in all respects that are material to this litigation to those instructions contained in the 2002 SAR Form.

The SAR Narrative Guidance was issued by FinCEN in 2003 with the "purpose" of "educat[ing] SAR filers on how to organize and write narrative details that maximize[ ] the value of each SAR form." SAR Narrative Guidance at 1. This "guidance document" describes in detail the Five Essential Elements of a SAR narrative, describes how a SAR narrative should be structured, and provides examples of sufficient and insufficient narratives for each type of filing entity. See id. at 1-2.

The "who" of the Five Essential Elements encompasses the "occupation, position or title ..., and the nature of the suspect's business(es);" the "what" includes "instruments or mechanisms involved" such as wire transfers, shell companies, and "bonds/notes;" and the "why" includes "why the activity or transaction is unusual for the customer; consider[ing] the types of products and services offered by the [filer's] industry, and the nature and normally expected activities of similar customers." SAR Narrative Guidance at 3-4. The "how" includes the "method of operation of the subject conducting the suspicious activity," by giving "as completely as possible a full picture of the suspicious activity involved." Id. at 6. The obligation to identify involved parties in a transaction extends to all "subject(s) of the filing," and "filers should include as much information as is known to them about the subject(s)." SAR Activity Review, Issue 22, at 39.

Examples of relevant information listed by FinCEN include "bursts of activities within a short period of time," SAR Narrative Guidance at 5, whether foreign individuals, entities, or jurisdictions are involved, 2012 SAR Instructions at 112, or the involvement of unregistered businesses, SAR Narrative Guidance at 5. A common scenario identified by FinCEN as suspicious involves a "[s]ubstantial deposit ... of very low-priced and thinly traded securities" followed by the "[s]ystematic sale of those low-priced securities shortly after being deposited." SAR Activity Review, Issue 15, at 24. FinCEN has explained that "[t]ransactions like these are red flags for the sale of unregistered securities, and possibly even fraud and market manipulation," and firms need to "investigate[ ] thoroughly" such questions as "the source of the stock certificates, the registration status of the shares, how long the customer has held the shares and how he or she happened to obtain them, and whether the shares were freely tradable." Id.

Broker-dealers are also required by regulation to maintain written AML policies that define how the broker-dealer detects potential money laundering and implements the duty to file SARs. This requires broker-dealers to engage in "ongoing customer due diligence," which includes

(i) Understanding the nature and purpose of customer relationships for the purpose of developing a customer risk profile; and

(ii) Conducting ongoing monitoring to identify and report suspicious transactions and, on a risk basis, to maintain and update customer information ... includ[ing] information regarding the beneficial owners of legal entity customers.

31 C.F.R. § 1023.210(b)(5).

In 2002, FinCEN delegated its BSA authority over broker-dealer AML programs to the SEC and SROs including FINRA. Pursuant to its supervisory authority over SROs, the SEC reviewed and approved AML best practices submitted by the SROs. FINRA Rule 3310 has governed its members' AML programs since 2009. Rule 3310 requires member firms to have a written AML policy that receives approval from FINRA's senior management and that "[e]stablish[es] and implement[s] policies, procedures, and internal controls reasonably designed to achieve compliance with the Bank Secrecy Act and the implementing regulations thereunder." FINRA Rule 3310(b) (2015). The Rule also requires that member firms "[e]stablish and implement policies and procedures that can be reasonably expected to detect and cause the reporting of transactions required under 31 U.S.C. 5318(g) and the implementing regulations thereunder." FINRA Rule 3310(a).

II. General Arguments

The SEC makes four categories of claims, each of which is separately addressed below. It asserts that Alpine filed SARs that failed to report in their narrative sections one or more of seven different types of information. It then asserts that Alpine failed to file SARs reporting suspicious sales following large deposits of LPS. The third set of claims concerns SARs that the SEC asserts were filed later than allowed by Section 1023.320. Finally, the SEC asserts that Alpine violated the law by not maintaining support files for many of the SARs it filed. Before addressing the specific violations on which the SEC seeks summary judgment, this Opinion addresses Alpine's general arguments about the propriety of this action.

Alpine contests whether the SEC has authority to bring this suit. In large part, these arguments were addressed in the March Opinion. See 308 F.Supp.3d at 795-97. Alpine argues that the SEC has not been empowered to sue for violations of the BSA. See id. at 795-96. According to Alpine, the Treasury Department, and in particular FinCEN, are empowered to enforce the BSA, and FinCEN has delegated to the SEC only the authority to examine a broker-dealer for compliance with the BSA but not the authority to enforce the BSA.

Alpine is correct that FinCEN has not expressly delegated BSA enforcement authority to the SEC. But, that ignores the separate statutory authority at issue here. The SEC has its own independent authority to require broker-dealers to make reports, and has enforcement authority over those broker-dealer reporting obligations. It was efficient for the Treasury Department to delegate its own duty to examine broker-dealers to the agency primarily responsible for regulating broker-dealers.

The Exchange Act requires broker-dealers to "make ... such reports as the Commission ... prescribes as necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of [the Exchange Act]." 15 U.S.C. § 78q(a)(1). One of the rules the SEC has promulgated pursuant to this statute is Rule 17a-8. As explained in the March Opinion, Rule 17a-8 is a valid exercise of the broad authority Congress conferred on the SEC in 15 U.S.C. § 78q(a)(1). Rule 17a-8 incorporates the reporting obligations imposed on broker-dealers in that section of the Code of Federal Regulations in which the SAR regime is contained. See March Opinion, 308 F.Supp.3d at 797.

Alpine also makes a related argument that the FinCEN guidance on which the SEC relies was not meant to create rules of law, but rather provided a number of suggestions that broker-dealers could consider when filing SARs. Alpine also contends that it lacked notice about its SAR obligations because some guidance documents were issued after certain transactions occurred. Neither argument is persuasive.

First, while FinCEN guidance is informative and useful, its role in this action can be overstated. The violations that the SEC asserts occurred here arose from Alpine's failure to comply with Section 1023.320's mandates and the SAR Form's instructions, including the requirement that it provide in its SARs' narratives a "clear, complete and chronological description [of] what is unusual, irregular or suspicious about the transaction(s)." 2002 SAR Form at 3. These instructions have the force of law, having been issued as FinCEN regulations following a notice and comment period.

Second, it has long been established that an agency's guidance documents receive deference when they reasonably interpret an agency's ambiguous regulation. See Nat. Res. Def. Council v. EPA, 808 F.3d 556, 569 (2d Cir. 2015) ; see also March Opinion, 308 F.Supp.3d at 791 (concluding that Section 1023.320 is ambiguous and that FinCEN guidance is entitled to deference). Alpine does not argue that Section 1023.320, including its injunction that a broker-dealer report suspicious transactions, is unambiguous. Indeed, that regulation is designed to capture the breadth of ways in which a broker-dealer could be "use[d]" to "facilitate criminal activity." 31 C.F.R. § 1023.320(a)(2)(iv). Nor does Alpine argue that FinCEN guidance unreasonably interprets either Section 1023.320 or the SAR Form. The FinCEN guidance cited by the SEC explains that certain fact patterns are typical of suspicious activity and should be reported by SAR filers. See SAR Narrative Guidance at 4-6 (listing "[e]xamples of some common patterns of suspicious activity" that should be included in a SAR narrative). These guidance documents, responding to the broad legal requirement contained in Section 1023.320, give content to a broker-dealer's obligation to file SARs.

Alpine also contends it is inappropriate to rely on some guidance documents cited by the SEC because those documents were promulgated after the SARs at issue were filed. The principal source of guidance cited here is the 2003 SAR Narrative Guidance. That document predates all of the SARs at issue. In addition, this Opinion cites several issues of the SAR Activity Review from 2000, 2009, and 2012. The 2012 issue is only cited, however, in conjunction with earlier guidance documents.

Alpine makes two additional arguments about its interactions with FINRA and the SEC. Alpine first argues that it did not have notice of the SEC's theory of this case until it received the OCIE Report in 2015 and that it is accordingly unfair to hold it liable for failing to include mention of red flags in its SARs' narratives that the SEC asserts it improperly omitted. This argument fails. The SEC has the burden to show that Alpine's failures violated Section 1023.320. The standards at issue here are those that have existed since the issuance of the 2002 SAR Form, which provided the mechanism by which broker-dealers comply with the requirements of Section 1023.320. Nothing OCIE did or said in 2015 can increase the scope of that duty. In addition, Section 1023.320 uses an objective standard to measure compliance. See March Opinion, 308 F.Supp.3d at 799. This standard obligated Alpine to file SARs when it had reason to suspect criminal activity. Its ignorance of its legal obligations or its intent in failing to comply with those obligations may be relevant to an award of damages, but they are not defenses to this motion regarding its liability.

Alpine next contends that its level of compliance with Section 1023.320 increased over time, and that it has shown that it tried in good faith to comply with its SAR obligations. It is true that approximately two-thirds of the SARs at issue in the SEC's motion predate the FINRA Report. But even if Alpine is correct that its program improved over time, this does not immunize Alpine for its past failures to include required information in any SAR narrative, or to file a SAR when it was required to do so. A broker-dealer's duty to maintain an AML program reasonably calculated to ensure compliance with the BSA is distinct from the duty to file a complete report of suspicious transactions.

Finally, Alpine asserts that holding it liable under the SEC's theory in this case would be extraordinary and wreak havoc with the SAR regime and the broker-dealer industry. Not so. This Opinion holds the SEC to the well-established summary judgment standard. The SEC is required to demonstrate that no question of fact exists regarding whether Alpine complied with Section 1023.320 for each SAR, missing SAR, or missing SAR support file on which it seeks summary judgment. To defeat the SEC's motion, all Alpine must do is raise a question of fact. Alpine has done so in a number of instances -- both as to individual SARs and as to entire categories of SARs. This Opinion denies summary judgment to the SEC wherever its presentation is deficient, and wherever Alpine identifies a question of fact as to the specific SAR or transaction at issue.

As described below, the SEC has shown that the failures in Alpine's SAR-reporting regime were stark. Tellingly, Alpine does not contest in a large number of instances that it failed to include information in SAR narratives that the SAR Form itself directs a broker-dealer to include. Given the sheer number of lapses at issue in this case, there is no basis to conclude that a broker-dealer that reasonably attempts to follow the requirements of Section 1023.320 will be at risk. And questions about what effect this action will have on the SAR regime are ultimately about policy, not the law a court must apply. This Opinion resolves the SEC's motion by applying well-established principles of administrative law and summary judgment. Following those principles, the SEC's motion is granted in part.

III. Admissibility of Summary Tables

Before addressing the various deficiencies in Alpine's compliance with the SAR reporting regimen that are asserted by the SEC, a threshold evidentiary issue must be resolved. Relying on Rule 1006, Fed. R. Evid., the SEC has supported its motion for summary judgment with ten tables that identify the SARs or transactions as to which it is asserting each alleged deficiency.

Rule 1006 provides that

[t]he proponent may use a summary, chart, or calculation to prove the content of voluminous writings, recordings, or photographs that cannot be conveniently examined in court. The proponent must make the originals or duplicates available for examination or copying, or both, by other parties at a reasonable time and place. And the court may order the proponent to produce them in court.

Fed. R. Evid. 1006. Such a summary must be "based on foundation testimony connecting it with the underlying evidence summarized and must be based upon and fairly represent competent [and admissible] evidence." Fagiola v. Nat'l Gypsum Co. AC&S, 906 F.2d 53, 57 (2d Cir. 1990) (citation omitted). Objections that a summary "d[oes] not fairly represent the [underlying] documents and [is] excessively confusing and misleading go more to [the summary's] weight than to its admissibility." U.S. ex rel. Evergreen Pipeline Constr. Co. v. Merritt Meridian Constr. Corp., 95 F.3d 153, 163 (2d Cir. 1996) (citation omitted).

The SEC's ten tables include seven that correspond to the seven alleged deficiencies in the SAR narratives. These seven deficiencies are the omission of (1) basic customer information, (2) "related" litigation, (3) shell company status or derogatory history of the stock, (4) stock promotion activity, (5) unverified issuers, (6) low trading volume, and (7) foreign involvement.

Each of these seven tables has six columns. The columns list the SAR item number, date filed, SAR Bates stamp, volume of shares in the transaction, value stated in the SAR narrative, and a final column with a heading describing the type of violation and a Bates stamp page number where the missing information was found in Alpine's support file for that SAR.

Table 10 is itself a summary table for Tables 1 though 7. It lists all 1,594 SARs for which the SEC contends the SAR narratives were deficient. Table 10 contains columns identifying the SAR number, the Alpine customer identified in the SAR, and the SAR Bates stamp number. Table 10 also has seven columns corresponding to the seven types of deficient narratives for which the SEC seeks summary judgment. Many SARs have entries in multiple deficiency columns. Those columns have a Bates stamp page number that gives the location in the Alpine SAR support file where information missing from the SAR narrative is found.

The two remaining tables are Tables 11 and 12. Table 11 lists sales-and-liquidation patterns. The SEC contends that Alpine had a duty to file SARs reflecting these sales, but did not do so. Table 11 lists 1,242 groups of transactions, organized as follows. The right half of the table lists a deposit date, the volume of the deposit, the value of the deposit, the date a SAR was filed reporting the deposit, and the Bates stamp number for that SAR. The left portion of the table lists a group number, the customer name, a liquidation date, the number of shares sold, and the stock symbol. The SEC contends that Alpine should have filed a SAR for at least each of the 1,242 groups.

Table 12 lists the SARs that the SEC alleges were filed late. It lists the SAR number, the Bates stamp number, the date of the transaction reported, the date the SAR was filed, the number of days between the transaction and SAR, and the number of days the SAR was late. The number of days late is calculated by subtracting 30 from the number of days between date of the transaction and the date the SAR was filed.

These tables summarize voluminous evidence that is not subject to convenient examination in court. This evidence is organized by subject matter. Each type of violation alleged in the case has its own separate table, and one table also allows the fact-finder to determine whether a single SAR is alleged to reflect multiple violations. The SEC seeks summary judgment as to approximately 1,800 SARs, and moves for summary judgment as to approximately 3,500 other transactions that are listed in Alpine's transaction records. Accordingly, the threshold for Rule 1006 -- that a summary be used to prove the content of voluminous writings -- is met. Alpine does not suggest that it has not had access to the underlying documentation -- which came from its files -- or that the SARs and the SAR support files referenced in the tables are not admissible documents.

To the extent that the tables list information such as an item number, date of SAR filing, Bates stamp number, volume of shares in the underlying transaction, and the value stated in a SAR, these are classic examples of information that is appropriately captured in a summary table. The SEC has merely taken a number or date from a voluminous quantity of admissible documents and placed the data in a convenient format for the fact finder. On this basis, there can be little debate that these components of Tables 1 through 7 and 10 through 12 are admissible.

To the extent that a column in a Table identifies a particular alleged deficiency in a SAR and lists a Bates stamp page number from the SAR's support file upon which the SEC relies to show that deficiency, those columns also summarize the contents of voluminous files and are admissible to prove the contents of those files. Alpine is free to argue that there are inaccuracies in the tables -- in fact, it has raised a few such arguments as to each of the tables. Subject to specific challenges by Alpine, therefore, these tables are admissible as summaries of the contents of voluminous admissible documents -- the Alpine SARs and their support files, and Alpine transaction records.

Alpine argues that a column heading identifying the particular deficiency at issue for a SAR is an expert opinion. It is not. That column heading reflects the SEC's contention and includes as well a citation to the documents supporting that contention. This citation permitted Alpine, and permits the fact finder, to assess whether that contention is proven in the case of an individual SAR. Indeed, expert testimony would be inadmissible to prove these violations. An expert's opinion may not "usurp either the role of the trial judge in instructing the jury as to the applicable law or the role of the jury in applying that law to the facts before it." United States v. Stewart, 433 F.3d 273, 311 (2d Cir. 2006) (citation omitted). A fact finder, advised of the governing law would have to assess whether Alpine complied with the law in filing each SAR identified in a table (or violated the law in failing to file a SAR for each group of transactions for which there was no SAR filed, again as identified in a table). For instance, advised by the court of what constitutes "related" litigation, does the SAR support file contain a description of such litigation, and was that information omitted from the SAR narrative?

Alpine also argues that Table 11 is inadmissible because the groups listed in Table 11 reflect expert conclusions unsupported by a reliable methodology. Not so. The group numbers are used by the SEC as a contention that each of the deposits and liquidations listed in a group form a suspicious pattern that had to be reported in a SAR. This is a question of fact to be resolved under the governing law. The SEC may have relied on an expert and consulting group to assist it in assembling the groups of transactions on which the SEC would focus in this action, but that task could have been done as well by an SEC attorney or an SEC paralegal. It reflects no more than the SEC's contentions. The fact finder, applying the controlling law, will have to examine the facts summarized in Table 11 and determine for each group whether there is an actionable pattern of suspicious trading that triggered Alpine's duty to file a SAR reporting the sales listed within a group. An expert cannot tread on that duty, which rests on the shoulders of a fact finder. Of course, a qualified expert could properly provide testimony generally about illicit and manipulative market activities and practices to inform a fact finder's examination of each of the listed groups, and improve its understanding of suspicious patterns, but the table by itself does not do that.

Finally, Alpine contends that the SEC has failed to carry its burden of proof by relying exclusively on the tables without also offering each of the SARs and support files to which the tables refer. That objection is not well founded. In connection with the partial summary judgment motion, the SEC submitted exemplar SARs and support files; Alpine chose not to do so. The legal framework for the litigation of the SEC's claims having been described in the March Opinion, the SEC appropriately relied on Rule 1006 to present in convenient and summary form the voluminous evidence on which it relies. Alpine has had a full opportunity to raise questions of fact in response and to submit SARs and support files where it takes issue with the SEC's assertions. This Opinion examines that evidence, and where appropriate, denies the SEC's summary judgment motion.

IV. Deficient Narratives

The first of the four categories of claims brought by the SEC concerns 1,593 SARs that Alpine filed. The SEC claims that Alpine was required by law to include information in 1,593 SAR narratives that Alpine omitted. The omitted information is found in the Alpine support files for each of these SARs. These alleged deficiencies in the SAR narratives fall into seven categories. Before addressing each of the claimed deficiencies, the SEC's allegation that Alpine was required to file each of these SARs is assessed.

A. Mandatory Filing

The issue of whether Alpine was in fact required by law to file the 1,593 SARs it did file became significant during the parties' briefing of the preliminary summary judgment motion. Here, the SEC asserts that Alpine was required by law to file each of these SARs. See 31 C.F.R. § 1023.320(a)(2) (describing when a SAR must be filed). The SEC advances a two-part test to determine whether the duty to file a SAR was triggered in this case because Alpine had reason to suspect that a transaction may involve use of a broker-dealer to facilitate criminal activity.

The SEC contends that, in the circumstances at issue here, Alpine had a duty to file a SAR where the underlying transaction involved a large deposit of LPS, and the transaction also involved either one of six red flags it has identified or the transaction was conducted by a certain customer. Each of the 1,593 SARs reported customer deposits of LPS worth at least $ 5,000. Many reported far larger deposits. Of those 1,593 transactions, 1,465 were cleared by Alpine for just six customers, which the parties identify as customers A through F. Ranking them in order of the largest number of SARs that Alpine filed for each of these customers, it filed 702 for A, 443 for E, 149 for C, 116 for F, thirty-seven for D, and eighteen for B.

Of the 1,593 SARs, the SEC contends that one or more of its identified red flags appears in the Alpine support files for 1,302 of those transactions, but is not mentioned in the SAR narrative. For the remaining SARs, the SEC relies on an alleged pattern of suspicious trading, specifically, that Alpine filed a large number of SARs for the same customer.

As described earlier in this Opinion, it is uncontested that the market for LPS is vulnerable to securities fraud and market manipulation schemes. These schemes depend on the deposit of a large amount of securities with a broker-dealer so that those securities can enter the market. Alpine does not take issue with either of these propositions.

Moreover, it is not unreasonable to infer from Alpine's very act of filing a SAR that the reported transaction had sufficient indicia of suspiciousness to mandate the creation and filing of a SAR. None of these SARs suggests that the filing was simply a voluntary act or otherwise filed outside of Alpine's attempt to comply with its duties under the law. After all, Alpine did have some version of an AML program in place during the time it filed these SARs, even if Alpine improved its AML program over time. And, for reasons already explained in the March Opinion, in the absence of an explicit statement that a SAR was a voluntary filing, it would have been unreasonable for anyone filing a SAR to assume that FinCEN or the SEC would know that a filed SAR was simply a "voluntary" filing, as opposed to one filed to comply with the law's mandates to alert regulators to suspicious trading activity. March Opinion, 308 F.Supp.3d at 799 & n.20.

In addition, with one exception, Alpine does not contest that the red flags on which the SEC relies are indeed red flags and that a broker-dealer should focus on these issues when reviewing transactions.

Accordingly, the SEC has shown that Alpine had a duty to file each of these 1,593 SARs so long as it also shows, as discussed below, that Alpine's support files for the SARs contained information about a qualifying red flag.

Alpine makes two arguments in opposition to the SEC's assertion that it was required to file these SARs. First, Alpine argues that there is no liability under the law for a broker-dealer's failure to file a SAR, only for failing to establish an adequate AML regime. Not so. While a deficient AML program may create liability, the failure to timely file a complete SAR may also create liability. This case involves the latter type of violation. As Section 1023.320(a)(1) states, in mandatory terms, a broker-dealer "shall file" a SAR "relevant to a possible violation of law or regulation." Alpine's position was also expressly rejected in 2002 by the Treasury Department when it promulgated Section 1023.320. The Treasury Department stated that "[a] regulator's review of the adequacy of a broker-dealer's anti-money laundering compliance program is not a substitute for, although it could be relevant to, an inquiry into the failure of a broker-dealer to report a particular suspicious transaction." FinCEN Section 1023.320 Notice, 67 Fed. Reg. at 44,053.

Alpine argues as well that the "sizeable LPS transaction-plus red flag" test proposed by the SEC for deposits of LPS fails to establish the reasonable suspicion that exists in criminal law pursuant to the Fourth Amendment. According to Alpine, that standard imposes on the SEC the duty to point to "specific and articulable" facts in Alpine's possession that would have given it a basis to believe there was a reasonable possibility that an entity or individual was involved "in a definable criminal activity or enterprise." (Emphasis supplied by Alpine.) Furthermore, it asserts that it would not be permissible under the reasonable suspicion standard for Alpine to rely on knowledge that the entity or person had engaged in wrongdoing in the past, had a claim pending against it, or had settled a claim.

Alpine does not explain why a Fourth Amendment concept should apply to the SAR reporting framework. Applying the standard used to determine the legality of a temporary, warrantless investigative detention of a person -- particularly as Alpine defines the standard -- would make little sense. Broker-dealers operate in a highly regulated industry, and both FinCEN

and the SEC have broad mandates regarding broker-dealer reporting regimes for securities transactions. The SAR reporting system was designed to allow law enforcement to monitor activity before any determination of unlawfulness is made.

By design, the SAR regime does not depend on or require a broker-dealer to make any finding of wrongdoing before it files a SAR. Section 1023.320 makes this clear: filing is required whenever a broker-dealer "has reason to suspect" that the transaction involves criminal activity. When FinCEN promulgated Section 1023.320, it considered and rejected the view that it would be "overly burdensome to require a broker-dealer to report transactions that could not definitively be linked to wrongdoing." FinCEN Section 1023.320 Notice, 67 Fed. Reg. at 44,051. Congress, when it enacted the legislation that authorized Section 1023.320, "sought to increase the reporting of transactions that potentially involved money laundering." March Opinion, 308 F.Supp.3d at 791 (emphasis supplied) (citing the Patriot Act, sec. 302, 115 Stat. at 296-97). Section 1023.320, accordingly, "target[s] all possible types of illegal activity." Id. (emphasis supplied).

As significantly, while Part II of the SAR Form provides boxes to check to identify the "Type of suspicious activity," these are broad categories such as "Market manipulation" or simply "Securities fraud." 2002 SAR Form at 1. The Form instructions also permit a filer to check "[m]ore than one box" and to check a box entitled "Other" with an explanation in the narrative. 2002 SAR Form at 1-2. The Form cannot be read to impose on the filer the dut