UBS Financial Services has been fined $125 million by the U.S. Treasury Department’s Financial Crimes Enforcement Network in what regulators described as the largest civil anti-money-laundering penalty ever imposed on a broker-dealer.
Authorities said the case involved willful violations of the Bank Secrecy Act tied to weak oversight of foreign currency wire activity and insufficient review of high-risk clients. The settlement also resolves related allegations brought by the Securities and Exchange Commission, the Commodity Futures Trading Commission and the Financial Industry Regulatory Authority.
What regulators said UBS failed to do
FinCEN said UBS Financial Services did not properly monitor more than 50,000 foreign currency wire transfers with a combined value of more than $10 billion. According to the agency, those shortcomings reflected inadequate controls over cross-border activity that should have been subject to stronger anti-money-laundering review.
Regulators also said the firm failed to carry out appropriate due diligence on high-risk customers with ties to Russia and Latin America. Officials warned that gaps of this kind can leave the financial system more exposed to illicit money flows moving across borders.
A repeat violation after an earlier penalty
The agency said the latest action followed earlier compliance failures that had already drawn enforcement. In 2018, UBS was assessed $14.5 million over similar anti-money-laundering weaknesses involving high-risk foreign transactions at its U.S. operations.
FinCEN said UBS did not disclose its continuing compliance gaps after that earlier case, despite prior commitments to improve its systems. The regulator characterized the new matter as a repeat violation, which it said justified the unusually large sanction.
Why the $125 million figure stands out
FinCEN described the $125 million penalty as the heaviest civil sanction of its kind ever assessed against a broker-dealer for anti-money-laundering breaches. That makes the case notable not only for its size, but also for the message regulators appear to be sending about repeat failures in Bank Secrecy Act compliance.
The action extends beyond a single agency. Alongside FinCEN’s order, the settlement resolves related accusations from the SEC, the CFTC and FINRA, bringing several strands of U.S. regulatory scrutiny into one outcome.
UBS response and the next confirmed step
UBS said it cooperated with regulators during the matter and has invested in its anti-money-laundering program. In a statement, the firm said those efforts were meant to bring its controls in line with leading industry practices.
For now, the confirmed outcome is the completed settlement with FinCEN and the resolution of the related claims cited by the other regulators. The case leaves a clear record that U.S. authorities viewed the firm’s deficiencies as both serious and recurring, especially after the earlier 2018 enforcement action.
Source: dailyhodl.com