Bank of America (BAC) is settling with the Securities and Exchange Committee to pay a $7.65 million penalty for a $4 billion capital error it disclosed earlier this year.
The Securities and Exchange Commission said Monday that it had charged the bank with breaking civil securities laws related to internal controls and record keeping.
The bank disclosed in April that it had miscalculated some capital levels since 2009. The error required the bank to resubmit its stress-test plans to the Federal Reserve, which oversees how much large banks can return to shareholders in dividends and share repurchases. Ultimately, the bank was able to keep its proposed 5-cent quarterly dividend but scrapped its plans for a share buyback.
The error was seen as a temporary setback for Bank of America CEO Brian Moynihan. In calculating its capital ratios before this year, the bank acknowledged that it went too far in stripping out "realized" losses on notes it assumed with its 2009 purchase of Merrill Lynch. The SEC said Monday that the misstatements grew each year as more notes matured, eventually reaching billions of dollars.