Bank of America ($BAC) agreed to pay $7.5 million to settle Securities and Exchange Commission allegations that its Merrill Lynch brokerage failed to properly investigate certain suspicious transactions and file required Suspicious Activity Reports (SARs) between April 2020 and September 2024. The SEC said Merrill's transaction monitoring system excluded some lower-risk events from review despite internal analyses showing some would have warranted SAR filings. Merrill neither admitted nor denied the SEC's findings.
- The SEC fined Merrill Lynch $7.5 million over failures to file required Suspicious Activity Reports from April 2020 through September 2024.
- The regulator said Merrill relied on a risk-scoring system that generally investigated only transactions scoring 20 or higher, despite identifying reportable activity below that threshold.
- Bank of America lowered the review threshold in December 2023, and the SEC cited the firm's cooperation and remedial actions in determining the settlement.
- Bank of America said it maintains rigorous anti-money laundering practices and continues to enhance its monitoring systems to detect and report suspicious activity.
Relevant Companies
- Bank of America ($BAC) – Merrill Lynch agreed to pay the $7.5 million SEC penalty and has updated its anti-money laundering transaction monitoring process.
- Morgan Stanley ($MS) – Large broker-dealers with anti-money laundering compliance programs may face increased regulatory scrutiny following the SEC's enforcement action.
- Goldman Sachs ($GS) – The case underscores ongoing regulatory expectations for suspicious activity monitoring and reporting across major brokerage firms.
Editor’s Note: This is a developing story. This article may be updated as more details become available.
