Bank of America penalty draws Canadian investor probe

What regulators found

The US Treasury said last week that its Financial Crimes Enforcement Network assessed a $1.2 billion penalty, the third-largest in Treasury history. It includes credit for a $750 million penalty from the Office of the Comptroller of the Currency (OCC), the largest in that agency’s history. A separate $11.6 million sanctions settlement brings the total to about $1.21 billion, CNBC reported.

The bank admitted it willfully violated the Bank Secrecy Act, NBC News reported. Regulators said it failed to report more than $5 billion in suspicious transactions on time. More than $1 billion of that involved priority national security risks, including Chinese money laundering networks and activity along the US southwest border, Fox Business reported. The bank must hire an independent third party to review activity its systems missed.

Treasury said the bank “effectively outsourced to third parties a substantial portion of its proactive detection,” according to 24/7 Wall St. Comptroller Jonathan Gould. The bank’s “egregious and continued BSA violations warrant the OCC imposing its largest [civil money penalty] ever assessed against a bank,” CNBC reported.

Bank of America said it was working with regulators to reach penalty resolutions, CNN reported. The OCC’s December 2024 cease-and-desist order carried no monetary penalty, American Banker reported. The action came less than a week after regulators fined American Express $350 million over similar failures, Axios reported.

Market reaction and open questions

The bank reported third-quarter results last week. Net income was $6.9 billion, down from $8.3 billion a year earlier. Earnings per share were 91 cents, or about $1.08 excluding a non-tax-deductible charge of roughly 17 cents a share, against analyst estimates near $1.10. Shares fell more than 8% at one point that day. They had closed at $53.96 the day before the penalty was announced, AskTraders reported.