A US regulator on Monday fined Bank of America $5 million for failing to report over-the-counter options positions approximately 7.42 million times, making it harder to monitor markets for possible manipulative behavior.
The Financial Industry Regulatory Authority said BofA Securities’ failures occurred from 2009 to October 2020, and included 26 options positions that exceeded applicable size limits by 20% to 2,900%.
FINRA also said the bank’s supervisory system was not reasonably designed to comply with reporting obligations to the regulator’s Large Options Positions Reporting platform from 2014 to October 2020.
Bank of America did not admit or deny wrongdoing in agreeing to settle, and has corrected the causes underlying the reporting failures, FINRA said. The regulator also imposed a censure.
In a statement, Bank of America said the matter arose from an “undetected system issue in the reporting process,” and that the Charlotte, North Carolina-based bank has added data quality checks to ensure it meets its reporting obligations.
FINRA is an independent nonprofit that recently regulated about 3,400 securities firms.
