SEC Charges Merrill Lynch, Parent Company With Failing to File Suspicious Activity Reports

By Stephen Nakrosis

The Securities and Exchange Commission said Tuesday it charged Merrill Lynch, Pierce, Fenner & Smith and parent company BAC North America Holding for failing to file hundreds of suspicious activity reports from 2009 to late 2019.

The SEC said BAC North America used a $25,000 threshold instead of the required $5,000 threshold "for reporting suspicious transactions or attempted transactions where a suspect may have been seeking to use Merrill Lynch to facilitate criminal activity and could not be identified." As a result, the parent company caused Merrill Lynch's failure to file many required suspicious activity reports, according to the SEC.

Merrill Lynch and BAC North America Holding didn't admit or deny the SEC's findings, the agency said. However, they agreed to "cease and desist from committing or causing violations of those provisions," the SEC said, adding Merrill Lynch agreed to a censure and will pay a $6 million civil penalty.

Merrill Lynch will also pay a separate $6 million fine to settle charges brought by the Financial Industry Regulatory Authority, without admitting or denying charges, the authority said.

A spokesperson for Merrill Lynch said, "Following an internal review, we reported this matter to regulators and have enhanced our process and training regarding these filings."

Write to Stephen Nakrosis at stephen.nakrosis@wsj.com

(END) Dow Jones Newswires

July 11, 2023 12:51 ET (16:51 GMT)

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