A drop in the bucket…
Bank of America Corp. admitted to wrongdoing in settling a U.S. regulator’s allegations that it misused billions of dollars in customer funds to finance trades that benefited the firm.
The bank will pay $415 million over claims that its Merrill Lynch unit engaged in complex transactions to reduce the amount of client funds that had to be set aside in reserve accounts, the Securities and Exchange Commission said in a statement Thursday. Had the firm failed, its customers would have been exposed to a “massive shortfall,” the regulator said.
The $356 million fine portion of Bank of America’s settlement is by far the largest for a firm accused of violating the SEC’s customer protection rule. The agency was assisted by multiple former Bank of America executives who reported wrongdoing and cooperated with the investigation, according to Jordan Thomas, an attorney at Labaton Sucharow who represents the whistle blowers.