WASHINGTON— The Treasury Department's Financial Crimes Enforcement Network (FinCEN) has assessed a record $125-million civil money penalty against UBS Financial Services, saying the firm failed to carry out anti-money-laundering reforms it agreed to after a 2018 enforcement action and continued to violate the Bank Secrecy Act. The penalty is the largest ever imposed by FinCEN against a broker-dealer under the law, Reuters reported.
FinCEN said UBS admitted it willfully failed to maintain an effective anti-money-laundering program and failed to file required suspicious activity reports. Regulators said the misconduct occurred between January 2019 and June 2023, despite a 2018 settlement in which UBS paid $14.5 million and agreed to strengthen its AML controls after deficiencies involving transaction monitoring, foreign currency wire transfers and suspicious activity reporting, Reuters said.
According to regulators, UBS failed to adequately monitor more than $10 billion in foreign currency wire transfers and conducted insufficient due diligence on high-risk customers, including clients with ties to Russia and Latin America. FinCEN said the settlement also resolves related allegations brought by the Securities and Exchange Commission, Commodity Futures Trading Commission and Financial Industry Regulatory Authority, and requires UBS to retain an independent consultant to further strengthen its AML compliance program.
In announcing the action, FinCEN said the case underscores that institutions that repeatedly fail to correct Bank Secrecy Act deficiencies will face increasingly severe penalties. UBS said it has invested heavily in strengthening its anti-money-laundering controls and has cooperated with regulators during the investigation, Reuters said.