BofA faces $1.21B fine and investor suits

Bank of America is facing intensified legal and regulatory pressure after U.S. authorities imposed combined penalties of $1.21 billion tied to its anti-money laundering and sanctions compliance practices. The actions, taken by the Financial Crimes Enforcement Network, the Office of the Comptroller of the Currency, and the Office of Foreign Assets Control, were the third-largest penalty ever levied by the U.S. Treasury.

U.S. Treasury officials alleged that Bank of America put revenues ahead of safety regulations by maintaining weak Bank Secrecy Act and sanctions controls. Treasury Secretary Scott Bessent said the actions show that even the largest financial institutions are not above the law.

In response, a Bank of America spokesperson said the bank takes financial crime compliance seriously and worked with regulators to reach the penalty resolutions, which stem from violations cited in a 2024 OCC Consent Order and a FinCEN investigation.

Bank of America’s stock price declined following the disclosure of the $1.21 billion penalty, with shares dropping 4.5% after the news. Shareholders were down about 7.8% year to date, reflecting ongoing investor pressure linked to the regulatory findings.

Chief Executive Officer Brian Moynihan addressed the financial impact during the bank’s third-quarter 2026 earnings call, stating that the $1.21 billion penalty equated to a $0.17 decline in earnings per share. For the same quarter, Bank of America reported net income of $6.9 billion on revenue of $30 billion, providing context for the scale of the charge relative to overall profitability.

Regulators and subsequent civil complaints focus on systemic weaknesses in Bank of America’s Bank Secrecy Act and anti-money laundering program. Allegations include missed or inaccurately reported suspicious transactions amounting to billions of dollars, as well as failures to maintain an adequate sanctions compliance program.

One complaint asserts that Bank of America internally documented its BSA/AML problems but did not remedy them, rendering certain public statements about its compliance efforts false and materially misleading during the relevant period.

Following the regulatory actions, multiple securities class action lawsuits have been initiated on behalf of Bank of America shareholders. One case, led by Hagens Berman, targets investors who held Bank of America stock between August 1, 2025 and October 13, 2026 on a U.S. exchange and sustained substantial losses.

Another lawsuit, brought by Schall, Brown & Schwartz LLP, alleges violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5. It covers the same August 1, 2025 to October 13, 2026 class period and contends that investors suffered damages when the market learned the full extent of the bank’s BSA/AML and sanctions issues.

For one of the cases, investors wishing to seek appointment as lead plaintiff face a deadline of December 15, 2026. To participate in a class action, claimants generally must show that they experienced financial losses linked to the alleged wrongdoing and that their losses meet criteria set by the court or the law firm.

The size and nature of the penalties have drawn attention on Capitol Hill. Senator Elizabeth Warren has argued that the $1.21 billion sanction is not severe enough and has called for a criminal investigation into the bank’s conduct.

Although there has been a petition for the Department of Justice to pursue a criminal probe, there is no official word of a criminal investigation. In the meantime, the regulatory penalties, stock price decline, and expanding shareholder litigation continue to shape the outlook for Bank of America and its investors.