Bank of America to Pay $1.21 Billion Over AML and Sanctions Breaches

what happened

Bank of America will pay $1.21 billion in penalties to resolve claims involving breaches of anti-money-laundering rules and sanctions requirements. Newsmetry API reported that the U.S. Treasury Department called the sum the third-largest fine in its history and the largest ever imposed by the Office of the Comptroller of the Currency.

The department said the bank had not reduced or reported priority national-security risks, including transactions pointing to Chinese money-laundering networks. The settlement includes a $750 million civil penalty for an anti-money-laundering compliance program described as “deficient and ineffective.”

Another $11.6 million will resolve allegations that the bank breached sanctions programs concerning Iran, Russia, narcotics and global terrorism. Bank of America admitted it willfully violated the Bank Secrecy Act, failed to meet its minimum AML-program obligations, did not perform due diligence on correspondent accounts for foreign financial institutions and failed to file suspicious activity reports, the Treasury Department said.

why it matters

For Bank of America shares, the settlement represents a substantial cost and puts additional market focus on compliance systems, sanctions controls and regulatory-risk management.

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