U.S. News

Bank of America Fined $3 Million for Breaking Money Laundering Rules


Bank of America's investment services unit was fined $3 million by the NASD to settle charges it failed to comply with anti-money laundering rules relating to "high risk" accounts.

The regulator said Banc of America Investment Services failed to obtain customer information for 34 high-risk accounts and did not communicate adequately with its parent to ensure
that suspicious activity reports were filed properly.

According to the NASD, the securities industry's self-regulatory arm, the 34 accounts involved trust and private investment companies domiciled in the Isle of Man, and apparently affiliated with one family. It said they held $79 million to $93 million in assets, and engaged in multimillion dollar wire transfers across international boundaries.

The NASD said that from August 2003 to October 2004, the unit did not require the names of the beneficial owners and never restricted activities in the accounts, despite having procedures in place to provide otherwise.

It said this defeated the purpose of anti-money laundering and terrorist financing laws designed to address high-risk accounts.

"BAI fundamentally failed to meet its obligations with these high risk accounts by failing to adequately investigate and pursue red flags, especially in the face of repeated requests for additional information about the accountholders from its own clearing firm," said NASD enforcement chief James Shorris in a statement.

Bank of America and its lawyers did not immediately return calls seeking comment.

In agreeing to settle, Banc of America Investment Services did not admit wrongdoing, the NASD said.