RCC Legal and Regulatory Frameworks 3 — Questions and Answers
Question 1: A financial institution is subject to both the Bank Secrecy Act (BSA) and state money transmission laws. Which principle governs when these two regulatory regimes impose different requirements?
- The state law always prevails under the 10th Amendment
- Federal BSA requirements set a floor; states may impose stricter requirements (Correct answer)
- The less burdensome regulation always applies
- Financial institutions may choose which regime to follow
Correct answer: Federal BSA requirements set a floor; states may impose stricter requirements
The BSA establishes minimum federal AML requirements, and states may enact stricter money transmission laws without being preempted.
Question 2: Which element distinguishes a 'per se' antitrust violation from a 'rule of reason' analysis under the Sherman Act?
- Per se violations require proof of market power; rule of reason does not
- Per se violations are automatically illegal without need to assess competitive effects (Correct answer)
- Rule of reason violations carry criminal penalties; per se violations only civil
- Per se analysis applies only to vertical restraints
Correct answer: Per se violations are automatically illegal without need to assess competitive effects
Per se violations (e.g., price-fixing, bid-rigging) are conclusively presumed illegal without weighing pro- vs. anti-competitive effects.
Question 3: Under the Foreign Corrupt Practices Act (FCPA), which defense is available to a company that made payments to a foreign official?
- The payments were under $10,000
- The payments were lawful under the written laws of the foreign country (Correct answer)
- The payments were made by a third-party agent without the company's knowledge
- The foreign official voluntarily solicited the payment
Correct answer: The payments were lawful under the written laws of the foreign country
The FCPA's 'local law' affirmative defense applies when the payment was expressly permitted under the written laws of the foreign official's country.
Question 4: Which concept in administrative law allows a court to set aside agency action that is 'arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law'?
- Sovereign immunity
- The hard look doctrine / APA Section 706 review (Correct answer)
- Primary jurisdiction
- Exhaustion of administrative remedies
Correct answer: The hard look doctrine / APA Section 706 review
APA Section 706(2)(A) authorizes courts to set aside arbitrary and capricious agency actions, and courts apply a 'hard look' to ensure reasoned decision-making.
Question 5: Under the Dodd-Frank Act's whistleblower provisions, what is the minimum percentage of sanctions an eligible whistleblower may receive for original information leading to a successful SEC enforcement action exceeding $1 million?
- 5%
- 10% (Correct answer)
- 30%
- 50%
Correct answer: 10%
Dodd-Frank Section 922 provides whistleblowers 10–30% of sanctions collected in qualifying SEC enforcement actions over $1 million.
Question 6: A company's compliance program is evaluated by the DOJ during a criminal investigation. Which factor is MOST critical in demonstrating an 'effective' compliance program under the USSG guidelines?
- The size of the compliance department budget
- High-level personnel assigned responsibility and adequate resources to implement the program (Correct answer)
- The number of compliance policies documented
- Whether the company has a publicly posted code of ethics
Correct answer: High-level personnel assigned responsibility and adequate resources to implement the program
USSG §8B2.1 requires that high-level personnel be assigned overall responsibility and that the program be given sufficient resources to be effective.
Question 7: Which federal statute imposes civil and criminal liability on any person who knowingly presents a false claim for payment to the federal government?
- The Sarbanes-Oxley Act
- The False Claims Act (Correct answer)
- The Anti-Kickback Statute
- The Program Fraud Civil Remedies Act
Correct answer: The False Claims Act
The False Claims Act (31 U.S.C. §§ 3729–3733) imposes treble damages and per-claim penalties for knowingly submitting false claims to federal agencies.
RCC Legal and Regulatory Frameworks 3
A financial institution is subject to both the Bank Secrecy Act (BSA) and state money transmission laws.
Which principle governs when these two regulatory regimes impose different requirements?