UBS Fined $125 Million in Largest Broker-Dealer AML Penalty
UBS Financial Services, a U.S. broker-dealer, has been fined $125 million by the Financial Crimes Enforcement Network (FinCEN) for willful violations of the Bank Secrecy Act. This is the largest civil penalty ever assessed against a broker-dealer for anti-money laundering (AML) shortfalls, according to a Reuters report. The fine stems from the firm’s inadequate oversight of foreign currency wires.
Authorities said UBS failed to properly monitor more than 50,000 foreign currency transfers valued at over $10 billion, despite earlier commitments to improve its systems. The company also did not conduct sufficient due diligence on high-risk customers with ties to Russia and Latin America.
Regulators noted that UBS did not disclose its ongoing compliance gaps following a $14.5 million assessment in 2018 for similar issues. Those earlier shortcomings involved weak controls over high-risk foreign transactions at the company’s U.S. operations. FinCEN described the current case as a repeat violation, justifying the steepest sanction in this category to date.
The settlement also resolves related accusations from the Securities and Exchange Commission, the Commodity Futures Trading Commission, and the Financial Industry Regulatory Authority. In a statement, UBS said it cooperated with regulators and has invested in its anti-money laundering program to bring it ‘in line with leading industry practices.’ Officials stressed that such lapses can expose the financial system to illicit fund flows across borders. The case serves as a reminder to financial institutions of the importance of effective anti-money laundering controls. This enforcement action is a clear signal to the financial services industry.