On Bank of America’s FLS

Yesterday, the Treasury Department announced what it described as “Record Enforcement Actions” against Bank of America in the form of $1.2 billion in fines and penalties, which the department called its third-largest penalty in Treasury history and the largest for the Officer of the Controller of the Currency.

The fines were focused on record-keeping in terms of money-laundering, which the department singled out as coming from “Chinese Money Laundering Networks” and “illicit finance along the Southwest border”.

“When a bank of this size fails to meet its anti-money laundering and sanctions obligations, the consequences extend far beyond its own walls, exposing the entire U.S. financial system to significant illicit finance risks,” Treasury Secretary Scott Bessent said in yesterday’s press release. “Today’s actions send a clear message that even the biggest financial institutions are not above the law.”

This morning, Bank of America is out with third-quarter earnings and the stock is down 5% on the news. One of the things that caught my eye is some of the tweaks in the company’s forward-looking statements — that oft-ignored (but heavily lawyered) boilerplate language that accompanies any earnings release.

As one might expect, there’s language up near the top about yesterday’s settlement where the company added this phrase, “including related to the adequacy of the Corporation’s anti-money laundering and economic sanctions programs (including the consent orders associated therewith.” Think about that for a second: when’s the last time you used the word therewith in a conversation? Total lawyer-speak!

Keep in mind that these forward-looking statements are over 900 words! And, they’re rendered in an image, which even with AI tools, makes direct comparisons a bit tricky.

Still, it’s a reminder why I’ve long-said that ignoring the Forward-Looking Statements is never a good idea. Companies routinely bury stuff in there time and again!