Compliance
Bank of America Faces $1.2 Billion Penalty for Anti-Money Laundering Violations
Bank of America has received a hefty penalty of more than $1.2 billion from the US Treasury, just a day before its third-quarter earnings report. This fine stems from the bank's failure to report over $5 billion in suspicious transactions, with more than $1 billion linked to national security risks, including connections to Chinese money laundering networks.
The penalties were imposed by three Treasury agencies, with the Financial Crimes Enforcement Network (FinCEN) levying the largest portion of $1.2 billion, marking it as the third-largest penalty in Treasury history. Additionally, the Office of the Comptroller of the Currency (OCC) imposed a $750 million civil money penalty, the largest ever from the agency, while the Office of Foreign Assets Control (OFAC) settled separately for $11.66 million due to apparent sanctions violations.
In a statement, a Bank of America spokesperson indicated that the penalties would result in a non-tax-deductible charge of approximately 17 cents per share, significantly affecting the bank's net income for the third quarter. The bank has acknowledged willfully violating the Bank Secrecy Act and has committed substantial resources to enhance its anti-money laundering efforts.
As a result of the penalties and prior warnings regarding declining investment banking fees, Bank of America's stock has seen a downward trend, closing at $53.96 before the penalty announcement and dropping further in after-hours trading.
Bank of America is set to report its earnings before the market opens, following a disappointing report from rival JPMorgan, with analysts expecting earnings per share of $1.12 on revenues of $30.62 billion.
FAQ
What was the total penalty imposed on Bank of America for anti-money laundering violations?
Bank of America was fined more than $1.2 billion by the US Treasury for failing to report over $5 billion in suspicious transactions.
Which agencies imposed penalties on Bank of America?
The penalties were imposed by three Treasury agencies: the Financial Crimes Enforcement Network (FinCEN), the Office of the Comptroller of the Currency (OCC), and the Office of Foreign Assets Control (OFAC).
What specific violations led to the penalties against Bank of America?
The penalties were due to Bank of America's willful violations of the Bank Secrecy Act, including failing to report suspicious transactions linked to national security risks and money laundering networks.
How will the penalties affect Bank of America's financial reporting?
The penalties will result in a non-tax-deductible charge of approximately 17 cents per share, significantly impacting the bank's net income for the third quarter.
What was the market reaction to the penalty announcement?
Following the penalty announcement, Bank of America's stock saw a downward trend, closing at $53.96 before the announcement and dropping further in after-hours trading.