Bank of America Corp. has been in discussions with U.S. regulators about paying $400 million to $450 million to settle allegations it violated rules designed to safeguard client accounts, according to people familiar with the matter. The Securities and Exchange Commission has been investigating whether Bank of America BAC, -3.78% had proper controls for some customer accounts and retail brokerage funds. One of the issues: whether the bank used complicated trades and loans to free up billions of dollars in cash for its own uses that it would usually have had to set aside to meet regulatory requirements, people familiar with the inquiry said. A settlement could be announced as soon as Thursday. A Bank of America spokesman declined to comment. A spokeswoman for the SEC declined to comment. A settlement of $400 million to $450 million would make the accord one of the largest ever for the SEC. It would also be the largest since a $616 million penalty paid by affiliates of SAC Capital Advisors LP in 2013. An expanded version of this report appears on WSJ.com.
Bank of America is reportedly close to a $450m settlement with the Securities and Exchange Commission (SEC), following allegations that the bank failed to safeguard client accounts. The SEC has been investigating whether the bank's mortgage servicing division was negligent in its oversight of loans it sold to Fannie Mae (FNM) and Freddie Mac (FRE), which were then used as collateral