📋 Tender Overview
The Securities and Exchange Commission announced charges against Merrill Lynch Pierce Fenner Smith Incorporated and its parent company BAC North America Holding Co. BACNAH for failing to file hundreds of Suspicious Activity Reports SARs from 2009 to late 2019. Merrill Lynch agreed to pay a 6 million penalty to settle the SEC charges and in a parallel action Merrill Lynch agreed to pay a separate 6 million fine to settle charges brought by the Financial Industry Regulatory Authority FINRA.According to the SECs order BACNAH assumed responsibility for creating and implementing Merrill Lynchs SAR policies and procedures and for filing Merrill Lynchs SARs. Over the course of a decade however BACNAH improperly used a 25000 threshold instead of the required 5000 threshold for reporting suspicious transactions or attempted transactions where a suspect may have been seeking to use Merrill Lynch to facilitate criminal activity and could not be identified. As a result BACNAH caused Merrill Lynchs failure to file hundreds of required SARs.Broker-dealers have a critical obligation to report suspicious activity in their accounts said Katharine E. Zoladz Co-Acting Regional Director of the Los Angeles Regional Office. Merrill Lynch and BACNAH did not file hundreds of Merrill Lynch SARs because they failed to comply with one of the most basic requirements for a SAR program.The SECs order finds that Merrill Lynch violated the books and records provisions of Section 17a of the Securities Exchange Act of 1934 and Rule 17a-8 thereunder and that BACNAH caused those violations. Without admitting or denying the SECs findings Merrill Lynch and BACNAH agreed to cease and desist from committing or causing violations of those provisions and Merrill Lynch also agreed to a censure and the aforementioned 6 million civil penalty.
