Bank of America has agreed to pay a total of $1.2 billion in penalties after admitting to failures in its Bank Secrecy Act and anti-money laundering compliance programs. The Office of the Comptroller of the Currency issued a record $750 million civil money penalty, while the Financial Crimes Enforcement Network levied the remainder of the fine.
Regulators determined that the bank willfully failed to maintain adequate internal controls, resulting in missed or delayed reports for over $5 billion in suspicious activity. This included roughly $1 billion linked to national security risks and Chinese Money Laundering Networks, characterized by inconsistent credit card purchases and wire transfers lacking commercial rationale.
Key facts
- The total penalty amounts to $1.2 billion, split between the OCC and FinCEN.
- The OCC’s $750 million fine is the largest civil money penalty the bureau has ever issued.
- The bank failed to report over $5 billion in suspicious activity due to inadequate internal controls.
- Approximately $1 billion of the unreported activity involved Chinese Money Laundering Networks and national security risks.
- Suspicious patterns included back-to-back credit card purchases and large wire transfers to China with generic descriptions.
- Bank of America stock dropped from around $62.69 in mid-September to under $50 on October 14.
Why it matters
The source documents that Bank of America stock fell from around $62.69 in mid-September to under $50 on October 14 following the announcement of the penalties.