Bank of America fined $7.65M by SEC because of accounting error
Bank of America is paying off $7.65 million because of an accounting error made five years ago.
Bank of America, accused of violating record keeping and overstating its capital levels, has agreed to pay off millions to settle federal charges.
The Securities and Exchange Commission accused the bank of failing to deduct losses on a portfolio of financial instruments that it acquired when it bought out Merrill Lynch in 2009.
The miscalculations resulted in the bank overstating its capital adequacy – how much regulators require the bank to hold – by approximately $4 billion.
The S.E.C. pointed out that the problem was self-reported by Bank of America and the bank took voluntary steps to solve the problem.
It disclosed its overstated capital levels in April. The bank cancelled plans to increase its dividend and $4 billion stock repurchases.
The bank now plans on increasing dividend shares from 1 cent per share to 5 cents per share, however, there will be no stock repurchases.
Andrew J. Ceresney, director of enforcement for the S.E.C., said:
“Bank of America self-reported its regulatory capital overstatements, remediated the issues quickly and cooperated in our investigation.”
“This penalty reflects credit for that cooperation, which allowed us to conduct our investigation efficiently and effectively.”