Bank of America Takes $1.2 Billion Fine and an 8% Stock Drop

Bank of America is paying more than $1.2 billion for violations of anti-money-laundering and sanctions laws — and its stock is paying too, falling more than 8% on Wednesday.

On Tuesday, October 13, the U.S. Department of the Treasury handed down the penalty. The bank, Treasury said, failed to report over $5 billion in "suspicious activity" to the Financial Crimes Enforcement Network (FinCEN).

The scale is specific. Over $1 billion of that activity involved "national security-related and other priority illicit finance risks, including suspicious transactions indicative of Chinese Money Laundering Networks, fraud, and potential trade-based money laundering with a substantial nexus to the southwest border," the Treasury stated in its announcement.

"When a bank of this size fails to meet its anti-money laundering and sanctions obligations, the consequences extend far beyond its own walls, exposing the entire U.S. financial system to significant illicit finance risk," Treasury Secretary Scott Bessent said in a statement.

That's the Treasury's framing: this isn't a paperwork problem at one bank, it's a system-wide exposure claim.

How big is this fine in historical terms?

The $1.2 billion penalty is the Treasury Department's third largest in its history. Only two precedents rank higher:

• Binance, fined $3.4 billion in 2023
• TD Bank, fined $1.3 billion in 2024

The total breaks into distinct pieces. The Office of the Comptroller of the Currency (OCC) levied $750 million — the largest fine in that regulator's history — for an "ineffective" anti-money laundering program.

The Office of Foreign Assets Control (OFAC) added an $11.6 million settlement. Small money, but the conduct behind it isn't: 475 "apparent violations of sanction programs" targeting Russia, Iran, global terrorism and narcotics, among other areas.

According to the Treasury, "these apparent violations occurred when Bank of America channeled correspondent banking payments through blocked banks due to technical and human error."

So: a record OCC penalty for a failed AML program, plus hundreds of sanctions breaches routed through blocked banks. The takeaway in plain words — regulators found both broken systems and broken process at the second-largest U.S. bank.

What did Bank of America say?

A Bank of America spokesperson, reached for comment by Fast Company, said the bank has invested "billions of dollars" in financial crime and is committed to addressing the issues raised by U.S. regulators.

"Financial crime compliance is serious, and we are responsible for getting it right," the spokesperson said in a statement. "We worked with regulators to reach these penalty resolutions stemming from violations cited in the previously reported 2024 OCC Consent Order and FinCEN's investigation."

Note the reference points: the 2024 OCC Consent Order and FinCEN's investigation. The bank frames Tuesday's penalty as the resolution of known issues, not new findings.

Why did the stock drop 8%?

Two hits landed at once. Shares of Bank of America Corporation (NYSE: BAC) fell more than 8% on Wednesday, following both the fine and an early-morning earnings report.

The numbers behind the miss: the company reported $30.12 billion in revenue for the third quarter, short of Wall Street's predicted $30.69 billion, according to consensus estimates cited by CNBC.

The fine itself cuts straight into earnings. "Our third-quarter results will include a non-tax-deductible charge of $1.2 billion impacting net income by approximately 17 cents per share," Bank of America's statement said. "We have already dedicated substantial personnel and resources to our ongoing remediation efforts, and those costs are in the current expense base."

That last line matters for forward math. Remediation spending is already baked into current expenses, which means the compliance bill won't end with the $1.2 billion check — it's an ongoing cost line investors will watch in future quarters.

By Grace Kim