SEC Fines Merrill Lynch USD 7.5 Million Over Suspicious Activity Reporting Lapses

U.S. Securities and Exchange Commission (SEC) has imposed a civil penalty of USD 7.5 million on Merrill Lynch, the brokerage unit of Bank of America, for failing to file some suspicious activity reports between April 2020 and September 2024.

According to the SEC, Merrill relied on Bank of America’s transaction monitoring software to comply with the Bank Secrecy Act, which requires broker-dealers to report suspicious transactions to the Financial Crimes Enforcement Network. The regulator said the software assigned risk scores to groups of suspicious events, but Merrill investigated only those with scores of 20 or higher, despite internal analyses indicating that some lower-scoring events also warranted reporting.

Merrill neither admitted nor denied the findings while agreeing to the settlement. The SEC said the firm cooperated with the investigation and later filed additional suspicious activity reports after lowering its internal review threshold.