Securities Class Action Filed Against Bank of America After Delayed Reporting of $5 Billion
Key Facts
A securities class action was filed on October 16, 2026, against Bank of America and its officers, accusing the defendants of violating securities laws, according to a federal court order. The action follows the U.S. Treasury Department’s statement that the bank was late in reporting suspicious transactions worth more than $5 billion to the Financial Crimes Enforcement Network. The transaction amount relates to the Treasury action published on October 13 and does not describe the subject of the court order. The lawsuit focuses on securities disclosures, while regulators addressed the bank’s failures to monitor transactions and meet its anti-money laundering obligations. The judicial and regulatory actions put the bank on separate tracks, as the class action continues in court.
The Treasury said more than $1 billion of the activity reported late was linked to priority illicit finance risks, including transactions indicating Chinese money laundering networks, fraud and trade-based money laundering. The Office of the Comptroller of the Currency said the bank’s transaction monitoring system failed to monitor transactions worth trillions of dollars. The office said this shortcoming led to a large number of suspicious activity reports being filed late. It also said the bank had known for years that it was not escalating potentially suspicious activity to investigators for review, but had not corrected the violation. In its October 13 statement, Treasury Secretary Scott Bessent said a bank of this size failing to meet its anti-money laundering and sanctions obligations exposes the U.S. financial system to illicit finance risks.
The Office of the Comptroller of the Currency announced a $750 million civil penalty against Bank of America on October 13 for violations of the Bank Secrecy Act and its regulations, calling it the largest penalty of its kind in the office’s history. The office said the Financial Crimes Enforcement Network is assessing a $1.2 billion penalty, from which the office’s $750 million penalty will be deducted, and that the bank is required to take remedial actions. The Treasury said the bank admitted that it willfully violated the Bank Secrecy Act of 1970, which requires banks to help the government detect and prevent money laundering. It also said the bank reached an $11.6 million settlement with the Office of Foreign Assets Control over apparent violations of sanctions programs. Those programs, according to the Treasury, included sanctions related to Iran, Russia, narcotics and global terrorism.
The required actions include a retrospective review in which the bank works with a third party to identify suspicious transactions that went undetected and report them to the Financial Crimes Enforcement Network. The consent order also requires an independent review of the effectiveness of suspicious activity monitoring and related programs. This follows a 2024 regulatory order, after which the Office of the Comptroller of the Currency said the bank had still not implemented many important steps needed to establish an effective Bank Secrecy Act and anti-money laundering compliance program, more than a year later. The office added that the bank had not prioritized compliance after agreeing to the earlier order. The remediation therefore includes a review of past transactions and an assessment of the effectiveness of systems and programs, alongside the fines announced by regulators.
A regulatory settlement related to the case affected the bank’s quarterly results, published on October 14. The bank reported net income of $6.9 billion and diluted earnings per share of $0.91 in the third quarter of 2026, compared with net income of $8.3 billion and earnings of $1.04 per share in the same period a year earlier. The bank said the results included a $1.2 billion regulatory settlement expense, which reduced diluted earnings per share by $0.17. Adjusted net income was $8.1 billion, and adjusted earnings per share were $1.08, according to the disclosure. In the same period, revenue rose 3% year over year to $30.0 billion, while net interest income increased 8% to $16.4 billion.