> ## Content Index > Fetch the complete content index at: https://www.lacaribenanews.com/llms.txt > Use this file to discover other available public pages before exploring further. # Bank of America's US$1.2 Billion AML Penalty Echoes Flaws Found at Merrill Lynch - URL: https://www.lacaribenanews.com/bank-of-america-aml-penalty-merrill-lynch-pattern/ - Published: 2026-10-14T22:10:29.000Z - Updated: 2026-10-18T05:18:25.000Z - Description: Bank of America's US$1.21 billion anti-money laundering penalty of 13 October 2026 follows Merrill Lynch settlements in 2017, 2023 and 2026 that found similar monitoring gaps, high thresholds and closed alerts. FinCEN's US$1.2 billion credits the OCC's US$750 million penalty. - Author: Theon Alleyne - Tags: Compliance, Financial Services, AML, Correspondent Banking, Analysis **Quick summary:** US regulators fined Bank of America more than US$1.21 billion on 13 October 2026 for anti-money laundering and sanctions failures. FinCEN found more than US$5 billion in suspicious activity reported late. Settlements with its brokerage, Merrill Lynch, in 2017, 2023 and 2026 describe similar monitoring and threshold defects. **By LCN Newsroom** US regulators fined Bank of America more than US$1.21 billion on 13 October 2026 for anti-money laundering (AML) failures. FINRA and SEC settlements with its brokerage, Merrill Lynch, in 2017, 2023 and 2026 describe similar defects. The comparison rests on four sets of records. In 2017 FINRA and the SEC found accounts left out of monitoring and alerts closed without review. In 2023 both found a reporting threshold set too high. In June 2026 the SEC found that Merrill relied on the bank's enterprise monitoring system and its score cut-off. The October 2026 orders from FinCEN and the OCC penalise the bank's own monitoring and reporting programme. ## What did US regulators find at Bank of America in October 2026? Three Treasury regulators found that Bank of America failed to report suspicious activity on time, applied weak due diligence to foreign correspondent accounts and committed apparent sanctions violations. [The Treasury](https://home.treasury.gov/news/press-releases/sb0657?ref=lacaribenanews.com) puts the combined penalties at more than US$1.21 billion. The figures overlap. The [Financial Crimes Enforcement Network (FinCEN)](https://www.fincen.gov/news/news-releases/fincen-assesses-12-billion-penalty-against-bank-america?ref=lacaribenanews.com) assessed US$1.2 billion. According to the [Office of the Comptroller of the Currency (OCC)](https://occ.gov/news-issuances/news-releases/2026/nr-occ-2026-89.html?ref=lacaribenanews.com), that amount "credits the OCC's $750 million penalty". The two are not added together. The [Office of Foreign Assets Control (OFAC)](https://ofac.treasury.gov/media/937231/download?inline&ref=lacaribenanews.com) imposed a separate US$11,662,930 penalty, which brings the total just above US$1.21 billion. The OCC calls its penalty the largest in the agency's history. Treasury says the actions include the third-largest penalty in its own. FinCEN's [consent order](https://www.fincen.gov/system/files/2026-10/BoA-Consent-Order-Execution-Final.pdf?ref=lacaribenanews.com) covers conduct between 1 January 2018 and 1 July 2025\. In that period, more than US$5 billion in suspicious activity went unreported on time. Roughly US$1 billion of it touched what FinCEN treats as priority risks: Chinese money laundering networks, fraud, and potential trade-based laundering with a substantial link to the US southwest border. Bank of America admitted wilful violations, but only in the civil enforcement sense used under the Bank Secrecy Act, as a footnote in the FinCEN order specifies. In the [OCC order](https://www.occ.gov/static/enforcement-actions/eaAA-ENF-2026-41.pdf?ref=lacaribenanews.com), the bank neither admits nor denies the findings. OFAC found 475 apparent sanctions violations between September 2021 and April 2025\. It classed them as non-egregious and granted no reduction from the base penalty. Bank of America's own [filing with the SEC](https://www.sec.gov/Archives/edgar/data/70858/000007085826000481/bac09302026ex991.htm?ref=lacaribenanews.com) records a US$1.2 billion charge for the third quarter of 2026\. The charge is not tax-deductible and cost the bank US$0.17 per share. ## What did the 2017, 2023 and 2026 Merrill Lynch cases find? Merrill Lynch, Pierce, Fenner & Smith Incorporated settled three anti-money laundering cases that bear directly on the October findings. [FINRA's 2023 settlement](https://www.finra.org/sites/default/files/2023-07/Merrill%5FLynch%5FPierce%5FFenner%5FSmith-AWC-No-2020066667001.pdf?ref=lacaribenanews.com) also records earlier FINRA anti-money laundering penalties of US$400,000 in 2011 and US$2.5 million in 2014, on different issues. \- **2017, FINRA and SEC, US$26 million combined.** FINRA censured the firm and fined it US$13 million under its Rules 3310(a) and 2010\. The SEC imposed US$13 million, a censure and a cease-and-desist order under Exchange Act Section 17(a) and Rule 17a-8, covering 2011 to 2015\. - **2023, FINRA and SEC.** Merrill Lynch applied the bank's US$25,000 reporting threshold instead of the US$5,000 threshold for broker-dealers, from January 2009 to November 2019\. About 1,500 suspicious activity reports went unfiled, according to FINRA. The SEC's 2023 order described "hundreds" of reports. - **June 2026, SEC.** Merrill Lynch relied on the bank's enterprise monitoring system, which investigated only higher-scoring alerts, from 8 April 2020 to 10 September 2024. These were settlements. In 2017 the firm neither admitted nor denied the findings; in 2026 it did not admit them. ## Did Merrill Lynch rely on Bank of America's monitoring? The 2017 and 2026 records say so. [FINRA's 2017 settlement](https://www.finra.org/sites/default/files/fda%5Fdocuments/2012035224301%20Merrill%20Lynch%20Pierce%20Fenner%20&%20Smith%20Inc%20CRD%207691%20AWC%20Redacted%20sl.pdf?ref=lacaribenanews.com) and the [SEC's 2017 order](https://sec.gov/files/litigation/admin/2017/34-82382.pdf?ref=lacaribenanews.com) both describe transaction monitoring as an enterprise-wide function at Bank of America. The [2026 SEC order](https://www.sec.gov/files/litigation/admin/2026/34-105790.pdf?ref=lacaribenanews.com) found that Merrill relied on the bank's enterprise system, and alerts scoring under 20 were not investigated. None of the documents reviewed by LCN states that the programme penalised in October is the same system that served Merrill Lynch. In 2023 the unit that applied the US$25,000 threshold belonged to the bank holding company, and the SEC named BAC North America Holding Company as a cause of the brokerage's violations. ## How did scores and thresholds hold suspicious activity back? In 2017, FINRA found that the system used a risk-based score threshold. Repeat events in two high-risk scenarios were scored only once. Extra risk scoring for high-risk jurisdictions and senior foreign political figures was applied inconsistently. In the [2023 SEC case](https://www.sec.gov/litigation/admin/2023/34-97872.pdf?ref=lacaribenanews.com), the cut-off was a dollar figure. Activity below US$25,000 did not trigger a report, although broker-dealers must report at US$5,000\. That gap lasted almost 11 years. In 2026, the cut-off was an alert score, applied between April 2020 and September 2024\. Bank of America's own sampling showed lower-scored alerts often produced reports, yet the threshold was not lowered until December 2023\. The SEC found that suspicious transactions worth hundreds of millions of dollars went unreported. The OCC's October order describes the bank receiving similar signals. From 2019 to 2023, management received reports that between 18 % and 44 % of potentially suspicious activity not referred for investigation went without a suspicious activity report. ## How much activity sat outside the monitoring net? In 2017, both regulators found that some accounts were left out of monitoring from about 2006 to May 2015\. The SEC put a size on it. From 2011 to 2013 the unmonitored accounts carried about 12 million transactions moving about US$105 billion, roughly 6 % of fund movements. Both 2017 documents also found that related accounts were not linked for some of the highest-risk customers. These included international branch accounts sharing a name, address or ownership, and accounts held in different currencies, such as US dollars and Mexican pesos. The October 2026 orders describe related failures. FinCEN found more than US$5 billion in suspicious activity not reported on time, and the OCC found that trillions of dollars in transactions were not properly monitored. ## Were alerts closed rather than worked? FINRA's 2017 settlement says the firm failed to investigate 1,015 instances of potentially suspicious activity. The SEC's 2017 order, and the corrective action statement in FINRA's own settlement, frame the same number differently: about 1,015 investigations completed during remediation, which produced seven suspicious activity reports. The SEC links about US$57 million in activity to those reports. Both regulators also describe alerts being retired. After a junior committee closed alerts, 646 open investigations were not reopened. FINRA records that the closures were driven by "too many false positives". The OCC's October order points to a far larger shortfall: the bank's case backlog peaked at close to 200,000 in 2024. ## What do the cases show about Caribbean and Latin American risk? The 2017 FINRA settlement names specific foreign activity. The SEC's 2017 order names no countries, referring instead to black market peso exchange and high-risk jurisdictions. FINRA's settlement describes a Venezuela-based importer and a Venezuelan black-market currency scheme that moved more than US$56 million. Venezuelan state money routed through the region is also the subject of [a US indictment unsealed this month](https://www.lacaribenanews.com/antigua-group-grand-venezuela-clap-indictment-pulido-2026/). It cites a McAllen, Texas branch with activity involving Mexico and a Mexican citizen with alleged ties to drug cartels. It lists a Miami branch with loans from a Cayman Islands Merrill affiliate, and a San Diego branch with activity involving countries including Haiti, Panama, Peru, Ecuador and Venezuela. LCN draws no further conclusion about the Haiti or Cayman references. The October 2026 orders name no Caribbean country. FinCEN and the OCC both found weak due diligence on correspondent accounts for foreign financial institutions, the obligation set out in 31 CFR 1010.610\. FinCEN focused on 12 foreign branches and affiliates of the bank that served more than 250 non-bank financial institutions, among them money services businesses. That profile resembles the position of many Caribbean respondent banks and [remittance firms](https://www.lacaribenanews.com/caribbean-remittances-haiti-ifad-idb-2026/), which reach the US dollar system through a large American correspondent. As context, not a finding of the orders: tighter correspondent scrutiny can lead banks to reconsider such relationships, a pattern the region knows as de-risking. The argument over where that line sits was examined in [After the Jenec Ruling, the World Disagrees on What Comes Next](https://www.lacaribenanews.com/jenec-ruling-caribbean-global-debanking-reaction/) and in [A Designation Is Not a Conviction](https://www.lacaribenanews.com/a-designation-is-not-a-conviction-the-global-debanking-debate-and-what-it-means-for-the-caribbean/). Regional supervisors met on the same question in Lima, reported in [The Caribbean's Best Performer Is Not Who You Expect](https://www.lacaribenanews.com/lima-compliance-congress-caribbean-gafilat-2026/). ## Were earlier warnings acted on? The records show at least one regulator finding that a known problem went uncorrected. The OCC's [December 2024 cease and desist order](https://www.occ.gov/static/enforcement-actions/eaAA-ENF-2024-56.pdf?ref=lacaribenanews.com) cited the bank's failure to correct a problem previously reported to it. The 2026 SEC order cites that OCC order, and the FinCEN consent order cites earlier SEC actions against Merrill Lynch, identified as 2023-128 and 3-22652. The Treasury release says detection was "effectively outsourced to third parties". FinCEN adds that the bank likely saved "hundreds of millions of dollars" in compliance costs. OFAC's settlement cites prior cautionary letters as an aggravating factor. Both regulators describe simplified due diligence: before August 2024, according to the OCC, and until December 2024, according to FinCEN. The parallels are structural, not proven to be causal. No document reviewed by LCN states that the brokerage cases and the bank case share a single root cause. | Defect | Merrill Lynch (brokerage) | Bank of America (bank), October 2026 | | --------------------------------- | ------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------- | | Reliance on enterprise monitoring | Enterprise-wide BAC function and system (2017); bank's enterprise system (2026 SEC) | Bank's own monitoring and reporting programme penalised | | Scores and thresholds | Score threshold, inconsistent risk scoring (2017); US$25,000 instead of US$5,000 (2023); alert score cut-off of 20 (2026) | 18 % to 44 % of unreferred activity went without a report, 2019 to 2023 (OCC) | | Activity outside the net | About 12 million transactions, about US$105 billion unmonitored, 2011 to 2013 (2017 SEC) | More than US$5 billion not reported on time (FinCEN); trillions not properly monitored (OCC) | | Cases closed or not worked | 1,015 instances not investigated; 646 investigations not reopened (2017) | Backlog near 200,000 cases in 2024 (OCC) | | Cross-border risk | Venezuela, Mexico, Cayman Islands, Haiti and others named (2017 FINRA) | Weak correspondent due diligence; no Caribbean country named | ## What should readers watch next? LCN found no US Department of Justice action in the public record reviewed for this article. As of October 2026, the penalties stand as civil settlements. Three questions remain. Will Bank of America say whether its remediation covers the enterprise system the SEC said Merrill Lynch relied on? Will correspondent reviews lead to exits among foreign non-bank clients, including any in the Caribbean? And will regulators of other US correspondents treat the October orders as a template? ### What the title card shows Every data point on the article's title card, in text. Source for all: the Treasury, FinCEN, OCC and OFAC enforcement documents of 13 October 2026, except where stated. - **US$1.21 billion.** The combined penalties, per the Treasury, which calls the actions the third-largest penalty in its history. - **US$1.2 billion.** The FinCEN penalty, which the OCC says credits its own US$750 million penalty. The two are not added together. - **US$750 million.** The OCC civil money penalty, which the OCC calls the largest in its history. - **US$11,662,930.** The OFAC settlement, covering 475 apparent sanctions violations between September 2021 and April 2025, classed as non-egregious. - **More than US$5 billion.** Suspicious activity not reported on time between 1 January 2018 and 1 July 2025, per the FinCEN consent order. - **Roughly US$1 billion.** The share of that activity the consent order ties to priority illicit finance risks, including Chinese money laundering networks, fraud and potential trade-based laundering with a substantial nexus to the US southwest border. - **Close to 200,000.** The peak of the bank's case backlog in 2024, per the OCC. - **3 settlements.** The Merrill Lynch anti-money laundering cases, in 2017, 2023 and June 2026, that describe comparable defects. ## Frequently Asked Questions How much was Bank of America fined for anti-money laundering failures in October 2026? The Treasury puts the total at more than US$1.21 billion. FinCEN assessed US$1.2 billion, which credits the OCC's US$750 million penalty, and OFAC added US$11,662,930\. The FinCEN and OCC amounts are not added together. Did Bank of America admit wrongdoing? Bank of America admitted wilfulness only in the civil enforcement sense used under the Bank Secrecy Act, according to the FinCEN consent order. In the OCC order, the bank neither admits nor denies the findings. What did earlier Merrill Lynch anti-money laundering cases find? In 2017 FINRA and the SEC fined Merrill Lynch US$26 million combined over unmonitored accounts and alerts left uninvestigated. In 2023 both found a reporting threshold set too high. In 2026 the SEC found reliance on the bank's alert score cut-off. How much suspicious activity did Bank of America fail to report? FinCEN found more than US$5 billion in suspicious activity was not reported on time between January 2018 and July 2025\. Roughly US$1 billion was tied to priority risks, including Chinese money laundering networks. Does the Bank of America penalty affect Caribbean banks? No Caribbean country is named in the October orders. Both FinCEN and the OCC found weak due diligence on foreign correspondent accounts, which could prompt US banks to scrutinise Caribbean respondent banks and remittance firms. *Disclosure: The publisher of La Caribeña News worked as a FINRA Examinations Manager from 2010 to 2014\. He had no involvement in the Merrill Lynch matters described here.*