NEW YORK – The Securities and Exchange Commission says Bank of America will pay $7.65 million to settle allegations that it overstated how much capital it had on its books.
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Bank of America Corp. said in April that it had made an error in how it how it valued securities obtained in its acquisition of Merrill Lynch during the financial crisis in 2009.
Banks are required to have enough capital on hand to protect them against adverse market conditions. The SEC says Bank of America overstated the amount of capital it had on hand. It says that overstatement eventually reached the billions.
As a result, the company had to submit a new capital plan to the Federal Reserve, suspended a bigger dividend payment and cancelled a stock buyback.
Bank of America declined comment on the latest penalty.