Legal Definitions - SAR

Definition: SAR is an abbreviation that can stand for two different things:

1. Stock-Appreciation Right: This is a type of financial incentive that some companies offer to their employees. It gives the employee the right to receive a payment based on the increase in the company's stock price over a certain period of time.
2. Suspicious-Activity Report: This is a report that financial institutions are required to file with the government if they suspect that a customer's transactions are related to illegal activity, such as money laundering or terrorism financing.

Examples:

• Stock-Appreciation Right: John's company offered him a SAR as part of his compensation package. If the company's stock price goes up by 10% over the next year, John will receive a payment of $10,000.
• Suspicious-Activity Report: The bank filed a SAR after noticing that a customer had made several large cash deposits in a short period of time, which seemed unusual for their account history.

The examples illustrate the two different meanings of SAR. In the first example, SAR refers to a type of financial incentive that rewards employees for the company's success. In the second example, SAR refers to a report that helps prevent illegal activity in the financial system by alerting the government to suspicious transactions.