Bank of America to pay $5M in fines over trading activities
Bank of America has agreed to pay $5 million to resolve allegations by federal authorities that had investigated the trading practices of the Charlotte-based bank.
The U.S. Attorney in Charlotte and a federal regulator announced two separate $2.5 million civil fines on Friday. The settlements, which also name the bank’s Merrill Lynch unit, stem from probes of some traders who worked in New York on complicated transactions known as “swaps.”
According to authorities, at least three traders who are no longer with Bank of America, eavesdropped on calls at the bank to learn in advance about certain block trades involving other large financial institutions. While listening in, the traders would begin trying to manage Bank of America’s own risk from those trades, authorities said. That activity place took place in 2008 and 2009, according to a settlement documents.
The regulator, the U.S. Commodity Futures Trading Commission, said Merrill Lynch failed to detect the activity of the traders, who later misled an outside group investigating block trades. Among other things, the CFTC said that from 2010 until at least June 2012, Merrill violated regulations by failing to prepare or maintain records of certain trades executed by the swaps desk.
In a statement, Jill Westmoreland Rose, the top federal prosecutor for the Western District of North Carolina, said her office’s settlement “reinforces our expectation that firms effectively monitor their employees and deal candidly with all regulators and law enforcement agencies.” The settlement involving the U.S. Attorney was struck in 2015 but not disclosed until Friday.
Bank of America spokesman Bill Halldin said the bank cooperated with authorities on the matters and has implemented improvements to its monitoring process.
Bank of America acquired Merrill Lynch in 2009. The bank employs about 15,000 in Charlotte.
Deon Roberts: 704-358-5248, @DeonERoberts
This story was originally published September 22, 2017 at 4:20 PM with the headline "Bank of America to pay $5M in fines over trading activities."