Merrill Lynch to Pay $6M to SEC to Settle Suspicious Activity Reports Charges

<p>The US
securities regulator has charged broker-dealer and investment management firm
Merrill Lynch and its parent company for failing to file hundreds of Suspicious
Activity Reports (SARs) for over a decade, starting from 2009. However, the
Securities and Exchange Commission (SEC) announced today (Tuesday) that Merrill
Lynch and BAC North America Holding Co. (BACNAH), its parent firm, have agreed
to a censure and to pay $6 million in civil penalty to settle the charges,
without admitting or denying the regulator’s findings. </p><p>Merrill
Lynch's Decade-Long Failure</p><p>In a
separate action, Financial Industry Regulatory Authority (FINRA) on Tuesday also <a href="https://www.finra.org/media-center/newsreleases/2023/finra-fines-merrill-lynch-6-million-longstanding-aml-program" target="_blank" rel="follow">slammed
a $6 million fine</a> on Merrill Lynch for the same failure. The membership-based industry regulator noted that suspicious activities such as alleged
unauthorized debit card withdrawals, forged or altered checks, account
intrusions, identity theft and internet scams, went unreported as a result of
Merrill Lynch's failure. </p><p>“Following
the 2009 merger between Merrill Lynch and Bank of America, N.A., Merrill Lynch
incorrectly applied the $25,000 monetary threshold applicable to national
banks, rather than the $5,000 threshold applicable to broker-dealers, when
determining whether to file a SAR,” FINRA explained. “As a result, Merrill
Lynch failed to file approximately 1,500 SARs from January 2009 to November 2019,
when the firm discovered and corrected its mistake.”</p><p>On its
part, the SEC pointed out that BACNACH handled the creation and execution of Merrill
Lynch’s SAR policies and procedures. It also oversaw the subsidiary’s filing
for these reports. </p><p>“Merrill
Lynch and BACNAH did not file hundreds of Merrill Lynch SARs because they
failed to comply with one of the most basic requirements for a SAR program,”
said Katharine Zoladz, Co-Acting Regional Director of the SEC’s Los Angeles
Regional Office. </p><p>As a
self-regulatory organisation, FINRA keeps active tabs on securities firms doing
business in the United States. The membership organization services to protect
investors and the integrity of the US securities market. </p><p>Since the
start of the year, FINRA has slapped varying fines on several
industry members, including <a href="https://www.financemagnates.com/institutional-forex/finra-slaps-900k-penalty-on-credit-suisses-us-subsidiary/" target="_blank" rel="follow">Credit Suisse</a>, <a href="https://www.financemagnates.com/institutional-forex/finra-hits-sagetrader-with-new-100k-fine-for-aml-failure/" target="_blank" rel="follow">SageTrader</a>, <a href="https://www.financemagnates.com/institutional-forex/finra-slams-475k-fine-on-ubs-securitiessecond-in-4-months/" target="_blank" rel="follow">UBS Securities</a>, <a href="https://www.financemagnates.com/institutional-forex/finra-fines-bgc-financial-175k-for-trace-reporting-errors/" target="_blank" rel="follow">BGC Financial</a>, and <a href="https://www.financemagnates.com/institutional-forex/finra-fines-nomura-securites-125k-for-miscalculating-its-net-capital/" target="_blank" rel="follow">Nomura Securities</a>. The fines are penalties for violations such as money laundering prevention,
inaccurate monthly statistics and late and inaccurate submissions of Trade
Reporting and Compliance Engine (TRACE) reports. </p><p>Spotware appoints new CEO; XS.com welcomes Marketing Manager; <a href="https://www.financemagnates.com/forex/news-nuggets-11-july-spotware-appoints-new-ceo-xscom-welcomes-marketing-manager/" target="_blank" rel="follow">read today's news nuggets</a>.</p>

This article was written by Solomon Oladipupo at www.financemagnates.com.