Bank of America Penalized $1.2 Billion Over Sanctions and Laundering Violations

U.S. regulators have imposed more than $1.21 billion in total penalties on Bank of America Corp. (BAC) for anti-money laundering failures and sanctions infractions. The Treasury Department's Financial Crimes Enforcement Network cited the institution for failing to report more than $5 billion in suspicious transactions on time, including networks tied to suspected money laundering and border fraud. In addition, the Office of the Comptroller of the Currency assessed a $750 million civil penalty for compliance deficiencies, and the Office of Foreign Assets Control added an $11.66 million fine for handling transactions involving blocked banks.

The penalty package ranks among the largest Treasury actions in history and comes at a delicate moment for the bank. Bank of America acknowledged willful violations of the Bank Secrecy Act as financial sector sentiment faces headwinds following lower quarterly results from peer lender JPMorgan Chase & Co. (JPM).

Market participants are looking ahead to Bank of America's third-quarter report on Wednesday morning. Wall Street consensus targets earnings of $1.11 per share on revenue of $30.69 billion, though executive guidance has already signaled softer performance in investment banking fees and trading revenue.