U.S. regulators said the Swiss bank’s brokerage business repeatedly failed to meet anti–money laundering requirements despite an earlier enforcement action, resulting in the largest Bank Secrecy Act penalty ever imposed on a broker–dealer.
UBS Financial Services has agreed to pay $125 million to resolve U.S. regulatory allegations that it repeatedly violated anti–money laundering requirements under the Bank Secrecy Act. According to the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN), the settlement represents the largest civil penalty ever assessed against a broker–dealer for violations of the law.
Regulators said the firm’s compliance failures persisted even after UBS was penalized in 2018 for similar shortcomings. The latest case covers conduct from January 2019 through June 2023, during which the bank admitted it did not maintain an effective anti–money laundering program and failed to file required suspicious activity reports in some instances.
Authorities identified weaknesses in the firm’s oversight of high–risk customers and international financial activity. Among the issues cited were inadequate due diligence involving clients connected to Russia and Latin America, as well as insufficient monitoring of more than $10 billion in foreign currency wire transfers. Regulators also highlighted cases involving individuals with ties to sanctioned or high–risk jurisdictions.
The agreement also resolves related matters involving the U.S. Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), and the Financial Industry Regulatory Authority (FINRA). As part of the settlement, UBS will retain an independent consultant to review and strengthen its anti–money laundering controls and compliance framework.
UBS said it has since made significant improvements to its compliance systems and considers the matter resolved. Regulators, however, emphasized that institutions that repeatedly fail to address anti–money laundering deficiencies should expect increasingly serious enforcement actions.
Key Takeaways
- UBS Financial Services will pay a $125 million penalty to settle anti–money laundering violations.
- FinCEN described the sanction as the largest Bank Secrecy Act penalty ever imposed on a broker–dealer.
- The violations occurred between 2019 and 2023, after UBS had already been fined for similar issues in 2018.
- Regulators cited failures involving customer due diligence, suspicious activity reporting, and monitoring of more than $10 billion in wire transfers.
- UBS has agreed to enhance its compliance program under the oversight of an independent consultant.
Sources
