Bank of America Fined USD 1.21 Billion Over Anti-Money Laundering Failures

Bank of America has been fined USD1.21 billion by US regulators for failing to detect and report more than USD 5 billion in suspicious transactions, including activity linked to national security and other illicit finance risks. The penalty, among the largest in the US Treasury Department’s history, is expected to affect the bank’s third-quarter earnings.

Regulators cited deficiencies in the bank’s anti-money laundering programmes and transaction monitoring systems, which delayed the reporting of suspicious activities. The bank has also been directed to appoint an independent third party to review past transactions and report previously undetected suspicious activities.

Bank of America said it has invested billions of dollars in technology and deployed thousands of employees to strengthen financial crime compliance. The fine includes a USD 750 million civil penalty imposed by the Office of the Comptroller of the Currency and an additional USD 11.6 million for apparent violations of US sanctions programmes.

The penalty is expected to weigh on investor sentiment, with analysts raising concerns about compliance costs and the bank’s share buyback plans. The case highlights the importance of effective transaction monitoring, robust internal controls and board-level oversight of financial crime risks.