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

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

Stratos Wealth Holdings closes 11 acquisitions in push for advisory scale
Stratos Wealth Holdings closes 11 acquisitions in push for advisory scale

RIA aggregator adds $4.8 billion in client assets across seven states as demand grows for alternatives to traditional succession models.

Beyond wealth management: Why the future of advice is becoming more human
Beyond wealth management: Why the future of advice is becoming more human

As technical expertise becomes increasingly commoditized, advisors who can integrate strategy, relationships, and specialized expertise into a cohesive client experience will define the next era of wealth management

Shareholder sues FS KKR Capital board, alleges NAV and dividend cover-up
Shareholder sues FS KKR Capital board, alleges NAV and dividend cover-up

Shareholder targets FS KKR Capital's directors over alleged portfolio valuation and dividend missteps.

UBS loses $1.2 million arbitration claim linked to variable annuities and margin
UBS loses $1.2 million arbitration claim linked to variable annuities and margin

UBS has a history of costly litigation stemming from the sale of volatile investment products.

'We are monitoring the situation,' SEC says of private funds
'We are monitoring the situation,' SEC says of private funds

New director David Woodcock puts firms on notice over fees, conflicts, and liquidity risk as private credit shows signs of stress.

SPONSORED Beyond wealth management: Why the future of advice is becoming more human

As technical expertise becomes increasingly commoditized, advisors who can integrate strategy, relationships, and specialized expertise into a cohesive client experience will define the next era of wealth management

SPONSORED Durability over scale: What actually defines a great advisory firm

Growth may get the headlines, but in my experience, longevity is earned through structure, culture, and discipline