The Supreme Court on Monday turned down a bid by a brokerage firm petitioning for review of the Securities and Exchange Commission’s (SEC) power to enforce the Bank Secrecy Act (BSA).

Alpine Securities Corp. is challenging charges brought against it by the SEC in 2017 regarding violations of reporting requirements for filing suspicious activity reports (SARs) as required by the BSA. The firm has argued the SEC is overstepping its bounds through its independent interpretation and enforcement of the law, which Congress entrusted to the Treasury Department.

The Treasury, in turn, has relied upon its Financial Crimes Enforcement Network (FinCEN) to primarily oversee and enforce the statute.

Alpine petitioned the Supreme Court to take up the case in July, after a second-circuit appeals court upheld the SEC’s authority to enforce the BSA under its books-and-records powers. The case received notable support in August from former FinCEN Director James Freis Jr. (2007-12) and Deputy Director Charles Steele (2009-11), who stated their concern the SEC’s enforcement of the law could lead to SEC-regulated firms taking a “better-safe-than-sorry approach” to SARs reporting, “even when they do not believe the conduct meets the threshold set forth in FinCEN’s regulations and guidance for suspicious activity.”

“If the Court turns this case down, it may never again have the chance to address this important and recurring issue,” Freis and Steele wrote.

Kyle Brasseur is Editor in Chief of Compliance Week. His background includes expertise in user personalization with ESPN.com.

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