US fines Bank of America US$1.2bil for anti-money laundering violations

The US Treasury Department has imposed penalties of over US$1.2 billion on Bank of America for violations of anti-money laundering and sanctions laws, according to a Tuesday announcement. The second-largest US bank failed to properly report more than US$5 billion in suspicious transactions, some involving national security risks and Chinese money laundering networks.

The charge includes a US$750 million civil penalty from the Office of the Comptroller of the Currency (OCC) and a US$11.6 million settlement with the bank over alleged violations of sanctions programs. Treasury Secretary Scott Bessent emphasized that the penalties send a message that even large financial institutions are accountable to the law.

Bank of America's third-quarter earnings report will be impacted by the US$1.2 billion charge, which will reduce net income by around 17 cents per share. The bank has agreed to work with a third party to identify undetected suspicious transactions and undergo an independent review of its monitoring programs. A cease-and-desist order will remain in effect until the issues are resolved, with the deadline set for December 2024.