Key facts
- UBS Financial Services Inc. was fined $125 million by FinCEN for willful violations of the Bank Secrecy Act.
- This is the largest penalty ever imposed on a broker-dealer for Bank Secrecy Act violations.
- The violations include failing to monitor over 50,000 foreign currency wires totaling more than $10 billion.
- UBS previously paid $14.5 million in 2018 for similar monitoring failures.
- The company also failed to conduct adequate customer due diligence, especially for clients with ties to Russia and Latin America.
- UBS admits to willfully violating the BSA and failing to file suspicious activity reports.
The U.S. Department of the Treasury's Financial Crimes Enforcement Network (FinCEN) has assessed a $125 million civil money penalty against UBS Financial Services Inc. (UBSFS) for willful violations of the Bank Secrecy Act (BSA), the primary U.S. anti-money laundering and countering the financing of terrorism law. This penalty represents the largest ever imposed on a broker-dealer for BSA violations.
FinCEN stated that UBSFS failed to appropriately monitor over 50,000 foreign currency wires totaling more than $10 billion, despite assuring regulators it would address underlying issues after a previous $14.5 million fine in 2018 for similar monitoring weaknesses. The agency also found that UBSFS did not disclose these failings, which came to light through a subsequent investigation. Furthermore, UBSFS neglected its customer due diligence obligations, particularly concerning high-risk clients with connections to Russia and Latin America, and failed to report hundreds of suspicious transactions.
UBSFS has admitted to willfully violating the BSA, including deficiencies in its anti-money laundering (AML) program and failure to file suspicious activity reports. As part of the resolution, UBSFS is required to conduct a lookback to identify and report undetected suspicious transactions and undergo an independent review of its AML program, focusing on priority illicit finance risks. FinCEN will waive up to $15 million of the penalty for expenses incurred by UBSFS in connection with this remediation.