Bank of America Fined $1.2 Billion for Failing to Report Suspicious Transactions
Key Summary
Bank of America has been fined $1.2 billion for failing to report over $5 billion in suspicious transactions, including those tied to Chinese money-laundering networks and the southwest border. The bank admitted to willfully violating the Bank Secrecy Act and prioritizing its revenues over anti-money laundering efforts. The settlement includes a $750 million civil money penalty and $11.6 million settlement with the bank over sanctions violations.
Background
Bank of America has been hit with a massive $1.2 billion penalty after regulators found the bank failed to report over $5 billion in suspicious transactions. The transactions included those tied to Chinese money-laundering networks and activity on the southwest border.
Regulatory Action
The Treasury Department's Financial Crimes Enforcement Network (FinCEN) said the bank willfully violated the Bank Secrecy Act by failing to keep a compliant anti-money laundering program and file suspicious activity reports. The OCC imposed a $750 million civil money penalty, the largest ever, and ordered the bank to hire a third party to review missed transactions.
Settlement Terms
The bank also agreed to a $11.6 million settlement with the Treasury over sanctions violations. The total penalty is the third-largest in FinCEN's history.
Bank of America admitted prioritizing its revenues over anti-money laundering efforts, saying it relied heavily on tips from law enforcement and other banks. The bank must cut its net income by about 17 cents per share and report the penalty as a non-tax-deductible charge in its third-quarter results.
Conclusion
The settlement is a significant blow to Bank of America's reputation and highlights the importance of anti-money laundering efforts in the financial industry.