Toronto Law Firm Probes Canadian Investor Claims After U.S. Fines Bank of America More Than US$1.21 Billion

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A multibillion-dollar banking controversy in the United States is now raising legal questions for Canadian investors, after American regulators imposed more than US$1.21 billion in penalties against Bank of America for serious failures in monitoring suspicious financial activity.

Toronto-based Milosevic & Associates PC announced on October 15, 2026, that it is investigating potential investor claims involving the banking giant, following enforcement actions announced by the U.S. Treasury Department two days earlier.

The investigation focuses on whether investors received an accurate picture of Bank of America’s efforts to address longstanding anti-money-laundering weaknesses.

With regulatory findings drawing attention to billions of dollars in suspicious transactions and the bank’s shares suffering a sharp decline, questions are emerging about corporate disclosures, investor confidence and whether Canadian shareholders may have grounds to pursue financial compensation.

Toronto Law Firm Opens Investigation Into Potential Canadian Investor Claims

Milosevic & Associates PC, a Toronto-based firm specializing in civil fraud litigation, announced on October 15 that it was examining potential claims involving Canadian investors who purchased Bank of America securities. The announcement followed sweeping regulatory penalties imposed on October 13 by the U.S. Treasury Department and its financial oversight agencies. The firm is assessing whether statements made by Bank of America about improvements to its anti-money-laundering compliance systems adequately reflected the problems regulators subsequently identified. The investigation could be relevant to Canadians holding the bank’s U.S.-listed shares or Canadian depositary receipts traded in Toronto.

Lawyer Andrew Morganti, who has represented investors in shareholder litigation involving Canadian and international companies, identified a potential inconsistency between the bank’s previous public statements and the American regulators’ findings. The firm invited investors who purchased qualifying securities between December 23, 2024, and October 13, 2026, to contact it. However, announcing an investigation does not establish that securities fraud occurred, that a class action has been authorized or that investors are entitled to compensation. Those questions would require additional legal analysis and, potentially, court proceedings.

U.S. Regulators Impose More Than $1.21 Billion in Penalties

The penalties announced on October 13 represent one of the largest American banking enforcement actions in recent years. The Treasury Department’s Financial Crimes Enforcement Network, known as FinCEN, assessed a US$1.2-billion penalty against Bank of America for failures involving anti-money-laundering controls and suspicious transaction reporting. Separately, the Office of the Comptroller of the Currency imposed a US$750-million civil penalty, the largest in that regulator’s history. The Treasury’s Office of Foreign Assets Control also announced an approximately US$11.66-million settlement involving apparent violations of American economic sanctions.

Importantly, the figures cannot simply be added together to calculate the bank’s total financial liability. FinCEN’s US$1.2-billion assessment credits the US$750-million OCC penalty, meaning the two amounts overlap rather than representing US$1.95 billion in separate payments. Combined with the sanctions settlement, the announced penalties exceed US$1.21 billion. The enforcement action ranks as the third-largest penalty in Treasury Department history. For shareholders, the immediate financial implications include a substantial regulatory expense, while the broader concerns involve management oversight, the effectiveness of compliance systems and the possibility of additional costs as the bank addresses deficiencies.

Earlier Regulatory Warnings Are Central to the Investor Investigation

Bank of America’s compliance problems were publicly documented well before the October penalties. On December 23, 2024, the OCC issued a cease-and-desist order identifying deficiencies in the bank’s anti-money-laundering and sanctions compliance programs. The regulator cited delayed suspicious activity reports, weaknesses in customer due diligence and shortcomings in internal controls, governance, training and independent testing. The order required corrective measures, including outside assessment of the bank’s compliance operations. Although the 2024 action did not impose an immediate monetary penalty, it established that regulators had serious concerns about the institution’s financial crime prevention systems.

The Toronto investigation focuses heavily on what Bank of America subsequently told investors. In a quarterly filing submitted July 31, 2026, the bank said it had completed significant steps toward satisfying the consent order, while acknowledging that resolving regulatory inquiries could involve monetary penalties. However, regulators stated in October that the institution had not made sufficient progress in addressing multiple weaknesses. Morganti argues that the contrasting descriptions deserve investigation. The bank’s earlier disclosure of possible penalties is an important qualification, however, and the difference between those statements does not by itself establish a legally actionable misrepresentation.

Regulators Identify More Than US$5 Billion in Suspicious Transactions

One of the most troubling findings concerns the volume of financial activity that Bank of America failed to report promptly to American authorities. FinCEN determined that the bank did not file timely suspicious activity reports covering more than US$5 billion in transactions. More than US$1 billion of that activity involved potential national security threats or other priority financial crime risks. Regulators identified warning signs associated with Chinese money-laundering networks, fraud and potential trade-based money laundering connected to the southwestern U.S. border. The amount involved demonstrates why regulators considered the weaknesses significant.

The failures extended beyond individual employees overlooking questionable transactions. According to Treasury officials, Bank of America’s monitoring systems failed to identify activity requiring investigation, while suspicious transactions sometimes remained unresolved for extended periods. Regulators also criticized the bank for relying excessively on law enforcement inquiries and alerts from other financial institutions rather than its own detection systems. Importantly, a suspicious transaction is not automatically proof that money laundering occurred. The regulatory violation concerns failures to identify, investigate and report activity as required by law. For investors, the findings raise questions about how effectively management supervised systems responsible for handling enormous volumes of customer transactions.

Sanctions Violations Involving Iran and Russia Add to the Controversy

The enforcement action also uncovered weaknesses in Bank of America’s compliance with international economic sanctions. The Treasury’s Office of Foreign Assets Control announced a settlement of US$11,662,930 involving 475 apparent violations across several sanctions programs. The affected restrictions included measures targeting Russia, Iran, Belarus, Myanmar, Somalia, narcotics trafficking and global terrorism. According to regulators, problems arose when the bank processed payments through blocked financial institutions, permitted prohibited transactions involving sanctioned individuals and failed to update screening lists promptly after new restrictions were announced.

These findings reveal how operational weaknesses can expose a global bank to financial and national security risks. A payment may appear routine to the customer initiating it, but banks must determine whether parties involved are subject to restrictions. OFAC attributed the apparent violations to combinations of technical problems, improperly calibrated alerts and human error. The agency classified the conduct as non-egregious and said most violations had not been voluntarily self-disclosed. Bank of America agreed to additional compliance commitments as part of the resolution. For shareholders, these issues create concerns extending beyond the immediate settlement payment, including future compliance spending and the potential consequences of inadequate sanctions controls.

Canadian Depositary Receipts Bring the Dispute Closer to Home

Canadian investors do not need to trade directly on the New York Stock Exchange to gain exposure to Bank of America. The bank’s Canadian Depositary Receipts, or CDRs, trade under the symbol BOFA on the Toronto Stock Exchange. The securities are issued by CIBC and provide fractional economic exposure to the underlying American shares. They trade in Canadian dollars and include a currency-hedging mechanism designed to reduce fluctuations caused by movements between the Canadian and U.S. dollars. The receipts began trading on the former NEO Exchange in January 2022 before moving to the TSX in December 2025.

Milosevic & Associates specifically identified these Canadian-listed securities in its announcement. According to the firm, Bank of America’s CDRs closed at C$27.02 on October 9 and subsequently fell to C$25.54 as investors absorbed the regulatory disclosures. The change matters for Canadians who purchased the receipts through ordinary investment accounts rather than dealing directly with American markets. However, holding a CDR is not legally identical to directly owning the underlying U.S.-listed shares. Any securities claim would need to consider the applicable Canadian depositary structure, transaction dates and relevant legal requirements.

Bank of America’s Share Price Falls as Quarterly Profit Declines

The regulatory penalties arrived just as Bank of America reported disappointing third-quarter financial results. On October 14, the bank announced net income of US$6.9 billion, down from US$8.3 billion a year earlier. Earnings fell to 91 U.S. cents per diluted share, compared with US$1.04 in the corresponding 2025 period. The regulatory settlement resulted in an approximately US$1.2-billion expense, reducing quarterly earnings by about 17 cents per share. Excluding that expense, adjusted earnings reached US$1.08 per share, still below the US$1.10 analysts had expected.

Investors also had other reasons to reassess the bank’s performance. Sales and trading revenue declined 5% to US$5.1 billion, while investment banking fees dropped 11% to US$1.8 billion. Bank of America shares opened approximately 8% lower on October 14 and experienced their sharpest pressure in months. However, net interest income increased 8%, suggesting some underlying banking operations remained resilient. The mixed results complicate the legal question of investor losses. A decline following regulatory news does not mean that every dollar of lost market value resulted from allegedly misleading disclosures, particularly when weaker trading performance and broader market conditions also influenced the stock.

TD Bank’s Earlier Money-Laundering Scandal Provides a Canadian Comparison

The Bank of America investigation carries an additional Canadian connection because of the major enforcement action against Toronto-Dominion Bank in 2024. On October 10 of that year, TD Bank and its American holding company pleaded guilty to criminal offences involving failures in anti-money-laundering compliance. The coordinated resolution required approximately US$3.09 billion in penalties. American authorities found that TD’s monitoring weaknesses had allowed enormous volumes of transactions to escape appropriate scrutiny. The OCC also imposed restrictions on the growth of TD’s American banking operations, making the settlement especially consequential for its expansion plans.

Morganti referred to TD’s earlier compliance failures when questioning Bank of America’s subsequent public statements. However, important legal differences separate the cases. TD’s resolution included criminal guilty pleas and growth restrictions, while Bank of America’s October 2026 action involves civil and administrative enforcement, including an admission of willful Bank Secrecy Act violations to FinCEN. Bank of America’s new consent order does not impose an asset-growth cap. The cases nevertheless highlight a recurring problem for large financial institutions: expanding business operations and processing enormous transaction volumes without sufficiently effective financial crime controls can create substantial regulatory, financial and reputational consequences.

Ontario Securities Law Could Determine Whether Investors Recover Losses

The potential Canadian claims raise a complicated legal question: whether Bank of America’s statements about its compliance problems could constitute actionable misrepresentations under securities law. Ontario’s Securities Act provides a framework for certain investors to seek damages when companies release materially misleading information or fail to disclose required changes. However, claims brought under its secondary-market disclosure provisions generally require court permission to proceed. The court must be satisfied that the proposed action is brought in good faith and has a reasonable possibility of succeeding. Whether those provisions apply to particular Bank of America securities and transactions would require careful legal examination.

The Toronto firm also highlighted Ontario’s rules governing the assessment of damages during the ten trading days after an alleged public correction. That period forms part of the statutory damages calculation; it is not a universal ten-day deadline for investors to file claims. Compensation can depend on purchase prices, sale dates, the relationship between alleged misstatements and market movements, and other statutory limitations. Investors who purchased securities during the firm’s identified period would therefore not automatically qualify for recovery. For someone whose retirement savings declined after the announcement, proving a legally recognized loss would be an important step beyond simply documenting a falling investment value.

Bank of America Says It Is Strengthening Controls as Investors Await Answers

Bank of America’s leadership maintains that extensive work has already been completed to address the compliance problems. During the company’s October 14 earnings discussions, Chief Financial Officer Alastair Borthwick said the bank had made substantial investments in employees and technology. CEO Brian Moynihan indicated that approximately 1,000 employees had been reassigned from other operations to strengthen the bank’s response and improve efficiency. Management also emphasized that the additional consent order does not restrict the bank’s asset growth or prevent it from conducting other business activities. The company said remediation expenses were already reflected in its operating outlook.

Nevertheless, regulators are requiring further independent oversight. Under FinCEN’s consent order, Bank of America must engage an outside party to review past transactions, identify previously undetected suspicious activity and assess the effectiveness of its monitoring and customer due-diligence systems. For Canadian shareholders, developments worth following include the bank’s regulatory progress, future financial disclosures and whether the Toronto investigation eventually results in formal litigation. The law firm’s October 15 announcement represents the beginning of a potential legal process, not a finding of investor fraud. Ultimately, the central question will be whether Bank of America’s public disclosures accurately reflected the compliance risks it knew about, and whether any legally significant deficiencies in those disclosures caused compensable investor losses.

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