Bank of America Reports $1.21 Billion Regulatory Penalty

Bank of America reported third-quarter net income of $6.9 billion on Wednesday, while a $1.21 billion regulatory penalty cut earnings and Treasury agencies said the bank had failed to report more than $5 billion in suspicious transactions. The results also fell short of analysts’ expectations, and the bank’s shares declined during trading. The bank reported diluted earnings of 91 cents per share, down from $1.04 a year earlier. Excluding the penalty, Bank of America said adjusted earnings were $1.08 per share, still below analysts’ expected $1.10. The regulatory charge reduced earnings by about 17 cents per share. The Treasury Department said more than $1 billion of the transactions involved national-security concerns. Regulators said the bank relied on law-enforcement investigations to identify suspicious activity rather than consistently finding it through its own monitoring. The penalty was imposed through civil enforcement actions by Treasury agencies. The announcements described in the reports did not mention the Justice Department; that does not establish whether any criminal investigation or future charges exist.