Insider Activities

Procedures

General Procedures

Many of the steps in these examination procedures require gathering information from, or reviewing information with, examiners in other areas of the examination. Since many other areas include examination procedures that address insider concerns, discussing this review with the examiners who evaluated those areas can reduce burden on the bank and avoid duplication of effort. By sharing examination data, examiners also can cross check compliance effectively and assess more readily the integrity of management information systems.

Information from other areas should be cross-referenced in the working papers as appropriate. Specific examination information that is not available from other examiners should be requested from the bank. However, the final decision regarding the scope of the examination and how best to obtain needed information rests with the examiner-in-charge.

Objective: To set the scope for the review of insider activities.

1.

  1. Obtain the following information:

    • The examination scope memorandum issued by the examiner-in-charge.

    • The most recent examination reports, including any reports issued by other regulators, as available.

    • Written insider policies, including a code of ethics.

    • Internal/external audit reports.

    • Reports in the OCC databases (e.g., UBPR).

    • Other internal bank reports.

  2. Determine any material changes since the previous examination. Examples include:

    • New executive officers.

    • New directors.

    • New affiliations or related interests by directors and/or management.

    • Ownership changes.

  3. Review, as appropriate, OCC databases, the previous examination report, examination reports of other regulators, internal/external audit reports, internal bank reports, and any trust examination report for information about conflicts of interest or insider abuse. Pertinent information may surface in the following examination areas:

    • Analytical review of income and expense.

    • Bank dealer activities.

    • Compliance management.

    • Deposit accounts.

    • Duties and responsibilities of directors.

    • Ownership records.

    • Trust department activities.

    • International banking.

    • Investment securities.

    • Loan portfolio management.

    • Private placements.

  4. Based on the performance of the previous steps and discussions with the bank EIC and other appropriate supervisors, determine the scope and set the objectives for this examination.

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