News

British Regulator Hits BofA With Record Fines

The U.K.’s Financial Conduct Authority has handed Bank of America Merrill Lynch a record-breaking $20 million fine for failure to properly report transactions over a seven-year period, Reuters reported. Specifically, the regulator says BofA’s Merrill Lynch International arm misreported over 35 million transactions between 2007 and 2014 and failed to report another 121,387 transactions entirely during the same time period.

The FCA noted Wednesday (April 22) that without accurate filings the market cannot be adequately monitored for insider trading and other illegal manipulations.

“Proper transaction reporting really matters. Merrill Lynch International has failed to get this right again, despite a private warning, a previous fine, and extensive FCA guidance and enforcement action in this area,” said Georgina Philippou, acting head of enforcement at the FCA, according to Reuters.

The prior fines Philippou refers to are 150,000 pounds in 2006 and a private warning in 2002.

“The size of the fine sends a clear message that we expect to be heard and understood across the industry,” Philippou added.

Bank of America Merrill Lynch responded to the fine with regret and a commitment to compliance with all FCA requirements going forward.

“While regrettable, today’s decision principally refers to self identified issues which we have sought to remediate as quickly as possible. We can confirm that no clients were financially impacted as a result,” the bank stated.

The total amount of the fine was calculated by charging approximately $2.25 per incorrect or non-reported transaction, up from a $1.50 pound per line in the three most recent transaction reporting cases. The upped amount was because the FCA found the lower fines have not been high enough to achieve “credible deterrence.”

Bank of America Merrill Lynch could have faced another $8 million in fines had it not settled at an early stage to obtain a 30 percent discount.

Bank of America is not the first bank to attract FCA fines -Deutsche Bank, Barclays, Credit Suisse, Instinet, Getco, Commerzbank, Societe Generale, City Index, James Sharp & Co, Plus500UK, and Royal Bank of Scotland have all been fined.

Though not as much – the previous record holder was RBS with a $8.4 million fine in 2013.

——————————

New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020 

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.

Click to comment

TRENDING RIGHT NOW