Bank of America has been fined $1.21 billion by US regulators over failures to detect and report suspicious financial activity, including transactions worth more than $5 billion, as per Reuters.
The US Treasury Department said more than $1 billion of the unreported activity involved national security concerns and other high-priority risks, according to the report. Reuters reported that Bank of America shares fell 2.7% in after-hours trading on Tuesday, after closing the regular session down 1.1%.
The US Treasury said the bank relied too heavily on information from law enforcement agencies and other financial institutions instead of using its own systems to identify potentially suspicious transactions. Regulators also said the bank prioritised revenue while developing its compliance programmes. The penalty is among the largest in the department’s history and is expected to affect the bank’s third-quarter earnings. Its transaction monitoring systems failed to flag suspicious activity in time, delaying reports to the government. Under a consent order, Bank of America must appoint an independent third party to review past transactions, identify suspicious activity that went undetected and report it to the Financial Crimes Enforcement Network (FinCEN). The announcement also weighed on investor sentiment.
