JP Morgan learns in court battle the limitations of SARs

The global investment giant is embroiled in costly litigation over allegedly corrupt payments it transacted after receiving clearance of Suspicious Activity Reports submitted to the UK’s Serious Organised Crime Agency. Denis O’Connor explores a case that will shed further legal light on a bank’s duty of care.

Denis O’Connoris a fellow of both the Institute of Chartered Accountants in England & Wales and the Chartered Institute of Securities and Investment. He was a member of the British Bankers’ Association Money Laundering Committee from 2003-10 and a member of the Joint Money Laundering Steering Group’s board and editorial panel between 2010 and 2016. He has been a frequent speaker at industry conferences on financial crime issues, both in the United Kingdom and abroad.

Six Suspicious Activity Reports (SARs) submitted by the London unit of JP Morgan (JPM) to the Serious Organised Crime Agency (SOCA) (now the National Crime Agency) between 2011 to 2013 reveal the bank’s increasing concerns about a $1.1 billion deposit made by the Nigerian Government. After receiving consent to pay $875 million from the account, JPM, via three transfers, sent the funds to Malabu Oil & Gas Limited (Malabu), a company controlled by Daniel Etete, a convicted money launderer and ex-Nigerian oil minister. The bank is now defending a claim by the Nigerian Government seeking the return of the funds in a 2022 High Court trial.