Merrill Lynch fined $45.5 million for failing to report trades

Bank of America unit omitted two years' worth of transactions, incurring a U.K. penalty under European markets regulations.
OCT 23, 2017
By  Bloomberg

Bank of America Corp.'s Merrill Lynch was fined 34.5 million pounds ($45.5 million) for failing to report two years' worth of exchange-traded derivatives transactions, making the bank the first in the U.K. to pay a penalty on that type of trades under the European Markets Infrastructure Regulation. The bank failed to report 68.5 million exchange traded derivative transactions, starting in Feb. 2014, the U.K.'s Financial Conduct Authority said Monday. European transparency rules came into force from 2012 to reduce risks in the derivatives market, and force banks to report the trades. Bank of America cut the fine by settling at an early stage of the probe. The FCA has penalized several firms for reporting and systems and controls failures in recent years. Last week, Rio Tinto Plc was fined 27.4 million pounds for breaching listing disclosure rules when it acquired a Mozambique asset in 2011. In January, Deutsche Bank AG was fined 163 million pounds for serious failings around its anti-money laundering controls that allowed it to transfer about $10 billion from unknown clients out of Russia to offshore accounts. "Effective market oversight depends on accurate and timely reporting of transactions," Mark Steward, FCA executive director of enforcement and market oversight, said. "It is vital that reporting firms ensure their transaction reporting systems are tested as fit for purpose, adequately resourced and perform properly. There needs to be a line in the sand." A spokeswoman for Bank of America said it had since "re-evaluated and improved" its processes. She said the bank told the FCA as soon as it realized that some trades hadn't been reported as required under the European Markets Infrastructure Regulation. The incident didn't have a financial impact on clients, she said. FCA fines for this year have totaled 190.8 million pounds.

Latest News

Maryland bars advisor over charging excessive fees to clients
Maryland bars advisor over charging excessive fees to clients

Blue Anchor Capital Management and Pickett also purchased “highly aggressive and volatile” securities, according to the order.

Wave of SEC appointments signals regulatory shift with implications for financial advisors
Wave of SEC appointments signals regulatory shift with implications for financial advisors

Reshuffle provides strong indication of where the regulator's priorities now lie.

US insurers want to take a larger slice of the retirement market through the RIA channel
US insurers want to take a larger slice of the retirement market through the RIA channel

Goldman Sachs Asset Management report reveals sharpened focus on annuities.

Why DA Davidson's wealth vice chairman still follows his dad's investment advice
Why DA Davidson's wealth vice chairman still follows his dad's investment advice

Ahead of Father's Day, InvestmentNews speaks with Andrew Crowell.

401(k) participants seek advice, but few turn to financial advisors
401(k) participants seek advice, but few turn to financial advisors

Cerulli research finds nearly two-thirds of active retirement plan participants are unadvised, opening a potential engagement opportunity.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today’s choppy market waters, says Myles Lambert, Brighthouse Financial.

SPONSORED Beyond the dashboard: Making wealth tech human

How intelliflo aims to solve advisors' top tech headaches—without sacrificing the personal touch clients crave