Brokerage giant Merrill Lynch is paying US$7.5 million to resolve regulatory charges arising from alleged failings in its anti-money laundering procedures.
The U.S. Securities and Exchange Commission (SEC) settled changes with Merrill Lynch, Pierce, Fenner & Smith Inc. — which, it alleged, breached its reporting and recordkeeping requirements by failing to file certain suspicious transaction reports between April 2020 and September 2024.
According to the SEC’s order, Merrill relied on the anti-money laundering (AML) program implemented by its parent, Bank of America Corp., which resulted in the broker failing to investigate potentially suspicious activity in certain cases — and failing to meet the AML standards required of brokerage firms.
Without admitting the regulator’s findings, Merrill agreed to a cease-and-desist order, a censure and to pay a US$7.5-million civil penalty.
The SEC noted that the firm cooperated with its investigation and took various remedial actions including revising its controls, reviewing past activity and filing suspicious transaction reports, and retaining a compliance consultant to beef up its AML program.