American Express shares dropped during pre-market trading on October 9 after the company’s banking subsidiary received a $350 million penalty notice from U.S. federal authorities. This penalty relates to deficiencies in the bank’s anti-money laundering (AML) and Bank Secrecy Act (BSA) compliance programs.
- American Express shares fell 0.37% to $306 in pre-market Nasdaq trading.
- The Office of the Comptroller of the Currency (OCC) cited failures in AML and BSA compliance.
- The bank did not properly monitor or report about $13 billion in suspected trade-based money laundering over a decade.
- The Federal Reserve Board also launched enforcement action against American Express for compliance failures.
- American Express commits to strengthening its financial crime compliance program.
What caused the $350 million penalty for American Express?
The penalty was issued because American Express National Bank, a wholly owned subsidiary, failed to establish and maintain an effective Bank Secrecy Act and anti-money laundering compliance program. The Office of the Comptroller of the Currency (OCC) found that the bank did not tailor its risk assessments properly and focused too narrowly on certain products while neglecting risks in its credit and charge card services.
How serious were the compliance failures?
The OCC reported systemic breakdowns in suspicious activity monitoring and reporting processes. These failures led to the bank not timely identifying or reporting approximately $13 billion of suspected trade-based money laundering over the past ten years. This is a significant lapse in financial crime controls.
What actions have federal agencies taken?
Besides the OCC penalty, the U.S. Federal Reserve Board has launched an enforcement action against American Express to address the firm’s failure to detect and report suspicious activities related to money laundering. These actions aim to ensure that American Express complies fully with U.S. laws and regulations.
How has American Express responded to the penalty?
American Express stated it takes its responsibility to combat financial crimes seriously. The company is committed to addressing the concerns raised by the OCC and Federal Reserve Board. It has identified areas for improvement in its Financial Crimes Compliance program through internal and external reviews. The company also investigated transactions involving misuse of its products and reported these to law enforcement.
Will the penalty affect American Express’s financial outlook?
The company said the civil money penalty relates to prior periods and will not impact its full-year guidance for 2026. It also does not expect the penalty to affect its 2027 guidance. Despite recent share price declines, American Express has delivered nearly 76% returns to investors over the last five years.
How has American Express stock performed recently?
American Express shares have declined 5% over the past year and 17% year-to-date in 2026. The stock dropped 4.2% in the last month but was up 1% over the past five trading sessions. The 52-week trading range was between $290.97 and $387.49 per share. As of October 9, 2026, the company’s market capitalization was approximately $205.46 billion.
Frequently Asked Questions
Q: What is the Bank Secrecy Act?
A: The Bank Secrecy Act is a U.S. law requiring financial institutions to assist government agencies in detecting and preventing money laundering and other financial crimes.
Q: What role does the Office of the Comptroller of the Currency play?
A: The OCC is a federal agency that charters, regulates, and supervises national banks and federal savings associations to ensure their safety and compliance with laws.
Q: How does American Express plan to improve compliance?
A: The company is reviewing and strengthening its Financial Crimes Compliance program, addressing concerns raised by federal regulators, and cooperating with law enforcement on suspicious activities.
