Bank of America Merrill Lynch being investigated by SEC: WSJ
Regulator wants to know if customer protection rule was violated
Bank of America Corp. is being investigated by the Securities and Exchange Commission over whether the lender broke rules designed to safeguard customer accounts, according to the Wall Street Journal.
The bank’s Merrill Lynch unit used a variety of large, complex trades and loans over a three-year period to save on funding costs and free up billions of dollars in cash and securities for trading that the firm would otherwise have needed to keep off-limits, the newspaper reported Tuesday, citing people familiar with the inquiry without naming them.
Bank of America stopped the trades in mid-2012, and now the SEC is investigating whether the strategy violated customer-protection rules and if the company misled regulators about its actions, the paper said.
The strategies were in place when Bank of America bought Merrill Lynch in 2009 and the company “fully complied with the rules designed to safeguard client funds,” Bill Halldin, a spokesman for the Charlotte, N.C., lender, said in an e-mailed statement.
John Nester, a SEC spokesman, declined to comment on the report.
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