By Jonathan Stempel
June 29 (Reuters) – The U.S. Securities and Exchange Commission fined Bank of America’s Merrill Lynch unit $7.5 million on Monday for failing to file numerous reports meant to flag money laundering and other suspicious client activity.
Merrill neither admitted nor denied wrongdoing in accepting the civil fine over failures to file numerous suspicious activity reports (SARs) from April 2020 to September 2024.
• The case stemmed from Merrill’s reliance on Bank of America’s transaction monitoring software to comply with the federal Bank Secrecy Act, which requires broker-dealers to file SARs with the U.S. Treasury Department’s Financial Crimes Enforcement Network.
• According to the SEC, the software aggregated potentially suspicious events into “event groups” and assigned them “risk scores.”
• The SEC said Merrill investigated only event groups with risk scores of at least 20 for possible SAR filings, even though its internal analyses showed that some event groups with risk scores below 20 would trigger SAR filings if investigated.
• Merrill cooperated with the SEC probe, and filed numerous SARs after lowering the threshold for internal reviews of suspicious events, the regulator said.
• In a statement, Charlotte, North Carolina-based Bank of America said it maintains rigorous anti-money laundering practices, and continually reviews its anti-money laundering systems to detect and report suspicious activity.
(Reporting by Jonathan Stempel in New York. Editing by Mark Potter and Chizu Nomiyama )
