According to Reuters, the regulator is concerned that Merrill Lynch and Charles Schwab did not do enough to check clients were using their true identities. It also suspects them of accepting shell companies and fake addresses, which are often used by criminals to move funds illegally. It is not clear what type of criminals may have channeled illegal funds through Merrill Lynch, but sources claimed that Charles Schwab was used to launder funds for Mexican drug cartels.

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/10850330/Bank-of-America-probed-for-ties-to-money-laundering.html