The hits keep coming for Bank of America (NYSE: BAC). The Charlotte based bank has recently been fined by the Financial Industry Regulatory Authority (FINRA) for failing to meet reporting deadlines. In fact, this is the second time in just the last few months that this has happened. The firm’s Project New BAC is aggressively striving to cut costs, hopefully those cost cuts are not jeopardizing the firm’s ability to meet its fiduciary and regulatory responsibilities.

The Merrill Lynch division will pay $500,000 as penalty for its supervisory failure or missing deadline for filing nearly 650 reports related to the brokers’ updates and details regarding customer complaints as well as settlements. FINRA stated that such failures occurred between 2005 and 2011. The firm is not alone in receiving fines from FINRA, with competitors Goldman Sachs (NYSE: GS), Citigroup (NYSE: C), and Wells Fargo (NYSE: WFC) also having fines assessed in the past year.

Apparently, the firm failed to give proper instructions or oversight to the employees who were responsible for tracking and reporting such customer complaints. As a result, these violations went unnoticed for years. FINRA rules require that the brokerage firms provide updated information regarding its brokers including criminal and civil complaints as well as regulatory actions against them along with the customer complaints and settlements. Further, all the required information should be made available within 30 days. In addition, the firms must submit a form while hiring a new broker or when the broker leaves. FINRA commented that the breaches might have hampered investors’ ability to assess the background of some brokers through the FINRA’s public disclosure system – BrokerCheck. Further, the violations hindered other brokerage firms’ ability to conduct background checks while hiring and lowered the ability of the regulators to review brokers’ transfer applications.

In June of this year, FINRA had penalized Merrill $2.8 million for supervisory failures related to overcharging nearly 95,000 customers in unnecessary fees and failure to provide certain required trade notices. While the broader firm struggles to get its house in order, the firm must clearly dedicate more resources to ensure regulatory compliance within its brokerage unit. Though Merrill neither admitted nor denied the charges levied by the FINRA, the penalty will somewhat dent the brokerage firm’s goodwill. This is also expected to marginally hamper its financial performance in the near term. Regulatory compliance is critical for broker dealers, and the firm must seek to improve the proper controls sooner rather than later. Fines like this may help expedite that cause.