FINRA orders Bank of America, Wells Fargo to pay more than $5 million

The Financial Industry Regulatory Authority (FINRA), Wall Street's watchdog, has asked the brokerage arms of Wells Fargo & Co and Bank of America Corp to pay more than $5 million in reimbursement and fine for selling floating-rate bank loan funds.

FINRA ordered Wells Fargo Advisors LLC to reimburse about $2 million and pay an additional $1.25 million in fine. It asked Bank of America's Merrill Lynch unit to reimburse about $1.1 million and pay $900,000 in fine.

The brokerages have been asked to reimburse the amount because the risk tolerance limit and financial conditions of their customers did not justify the purchases, FINRA said.

Floating-rate bank loan funds are mutual funds that generally invest in a portfolio of secured senior loans made to entities whose credit quality is rated below investment-grade.

The brokerages neither admitted nor denied the charges.

(Reporting by Avik Das in Bangalore; Editing by Maju Samuel)