Broker-dealer Merrill Lynch has been fined $12 million by regulators for failing to file approximately 1,500 suspicious activity reports (SARs) over a span of more than ten years, The Wall Street Journal reports.
Regulatory Requirements
Under U.S. anti-money-laundering rules, broker-dealers are required to file SARs for transactions exceeding $5,000 that could indicate criminal activities. However, Merrill Lynch, a subsidiary of Bank of America BAC, used a $25,000 threshold for reporting SARs between 2009 and late 2019, according to the Securities and Exchange Commission (SEC).
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Penalties and Repercussions
Merrill Lynch has agreed to pay $6 million to settle the SEC charges. In a parallel enforcement action, the Financial Industry Regulatory Authority (FINRA) fined Merrill an additional $6 million for longstanding anti-money-laundering program failures.
“Following an internal review, we reported this matter to regulators and have enhanced our process and training regarding these filings,” a spokeswoman for Merrill Lynch stated.
Bank of America was also ordered to pay a $250 million penalty for opening credit-card accounts without customers’ consent and double-charging fees. Broker-dealers’ compliance with filing SARs has been a top priority for examinations by the SEC and FINRA in recent years.
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