SEC Charges Merrill Lynch for Failure to File Suspicious Activity Reports

by Warren Seah

The Securities and Exchange Commission (SEC) has recently taken action against Merrill Lynch, Pierce, Fenner & Smith and its parent company BAC North America Holding for their failure to submit hundreds of suspicious activity reports between 2009 and late 2019.

According to the SEC, BAC North America opted to use a $25,000 threshold instead of the mandatory $5,000 threshold for reporting suspicious transactions or attempted transactions. This deviation resulted in the parent company’s negligence and caused Merrill Lynch to neglect its obligation to file necessary suspicious activity reports.

Merrill Lynch and BAC North America Holding have not admitted or denied the findings presented by the SEC. However, both parties have agreed to “cease and desist from committing or causing violations of those provisions,” as stated by the SEC. Additionally, Merrill Lynch has accepted a censure and will pay a civil penalty of $6 million.

Regarding these allegations, a spokesperson for Merrill Lynch commented, “Following an internal review, we reported this matter to regulators and have enhanced our process and training regarding these filings.”

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