Bank Of America Stock Slips After OCC Issues Cease-And-Desist Order: Retail Sentiment Sours

The OCC order requires the lender to take comprehensive corrective actions to enhance its BSA/anti-money laundering (AML) and sanctions compliance programs.

Shares of Bank of America (BAC) fell over 1% on Monday after the Office of the Comptroller of the Currency (OCC) issued a cease-and-desist order against the lender for failing to timely file suspicious activity reports and correct a previously identified deficiency related to its customer due diligence processes.

The OCC said the order also identifies deficiencies in the lender's BSA compliance program's internal controls, governance, independent testing, and training components.

The bank has neither admitted nor denied the findings of the OCC.

However, a Bank of America representative told Bloomberg in an emailed statement that the bank has been working closely with the Office of the Comptroller of the Currency over the past year to improve its anti-money-laundering and sanctions programs. “The work we’ve done so far positions us well to implement the requirements of the consent order.”

The OCC order requires the lender to take comprehensive corrective actions to enhance its BSA/anti-money laundering (AML) and sanctions compliance programs. This includes hiring an independent consultant to assess these programs and conduct look-back reviews to ensure all suspicious activity was appropriately reported.

Following the announcement by OCC, retail sentiment on Stocktwits dipped into the ‘bearish’ territory (44/100) from ‘neutral’ a day ago.

Most retail chatter on Stocktwits indicated a negative bias toward the stock.

Earlier this month, Morgan Stanley downgraded the shares of Bank of America to ‘Equal Weight’ from ‘Overweight’ while raising its price target to $55 from $48, according to The Fly. The brokerage expects a more balanced risk-reward and prefers money centers with a higher skew to capital markets.

Meanwhile, shares of BAC have gained over 28% since the beginning of the year.

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