Bank of America to pay $1.2bn over unreported suspicious transactions
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Bank of America agreed to pay $1.2bn in penalties after US regulators found it failed to detect and report suspicious transactions, exposing the financial system to illicit finance risks. The Treasury said the bank relied too heavily on information from outside parties instead of using its own controls to identify and report potential wrongdoing.
The bank failed to report more than $5bn in suspicious activity, including $1bn that the Treasury said posed national security or illicit finance risks. It admitted wilfully violating the Bank Secrecy Act, including by failing to maintain a compliant anti-money laundering programme and file required reports. The settlement includes a record $750m penalty from the Office of the Comptroller of the Currency and an $11.6m settlement tied to 475 apparent sanctions violations involving Russia, Iran, narcotics and global terrorism; the bank said the charge would reduce quarterly net income by about 17 cents per share.
- Bank of America will pay $1.2bn over missed suspicious transactions.
- More than $5bn in activity went unreported.
- The settlement includes a record $750m OCC penalty.
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US banks must monitor transactions for signs of money laundering and other financial crime, and report suspicious activity to the authorities. The Bank Secrecy Act sets out these duties, while the Treasury Department and banking regulators oversee parts of the system.
Bank of America is one of the largest banks in the United States. The Office of the Comptroller of the Currency supervises national banks, and the Treasury’s sanctions office enforces restrictions on dealings with certain people and organisations.
Suspicious transactions can involve moving money to disguise its source or evade sanctions. Reporting them helps authorities investigate possible crime and assess risks to the financial system and national security.
Both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
A substantial penalty is justified because banks have a legal duty to monitor suspicious transactions and report them, and failures involving billions of dollars can expose the financial system to money laundering and national security risks. A record fine may reinforce those obligations, encourage investment in effective compliance, and show that large institutions are accountable when they admit wilful violations.
The case against
A very large penalty can be questioned if its scale is not clearly tied to the bank’s culpability, the harm caused, or the effectiveness of reforms; predictable and proportionate enforcement may better support compliance than headline-sized fines. The settlement also imposes costs on shareholders and could ultimately affect employees or customers, so a thoughtful case for restraint would favour penalties calibrated to deter misconduct while preserving resources for remediation.
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Originally published by BBC World as “Bank of America hit with $1.2bn fine for money laundering failings”.