SEC probes Bank of America over customer funds: source
[WASHINGTON] Bank of America Corp is being investigated by the Securities and Exchange Commission over whether it broke rules designed to safeguard customer accounts, according to a person with knowledge of the probe.
Investigators are examining a variety of large, complex trades and loans over a three-year period intended to save on funding costs and free up billions of dollars in cash and securities for trading that the firm otherwise would have needed to keep off-limits, the Wall Street Journal reported Tuesday, citing unidentified people familiar with the inquiry.
Bank of America stopped deploying the strategy in mid-2012, and now the SEC is investigating whether it violated customer- protection rules and if the company misled regulators about its actions, the newspaper reported.
The strategies were in place when Bank of America bought Merrill Lynch in 2009 and the company "fully complied with the rules designed to safeguard client funds," Bill Halldin, a spokesman for the Charlotte, North Carolina lender, said in an e-mailed statement.
The bank doesn't comment on the existence of regulatory inquiries, he said.
John Nester, an SEC spokesman, declined to comment on any investigation.
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