U.S. federal regulators have levied a total of $153 million in fines against UBS Group AG, alleging the firm failed to meet anti-money laundering requirements and other compliance programs. The Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Treasury, imposed a $125 million civil penalty on UBS on Monday. The agency stated that UBS willfully violated the Bank Secrecy Act, which effectively authorizes banks to serve as the first line of defense against money laundering.
FinCEN noted that this fine represents the largest penalty ever imposed on a broker-dealer for violating the Bank Secrecy Act. Monday's action marks FinCEN's second enforcement action against UBS. The agency previously imposed a $14.5 million civil penalty in December 2018, partly due to findings that UBS failed to adequately monitor foreign currency wire transfers because of deficiencies in its automated surveillance system.
"Despite UBS' assurances to FinCEN that it would promptly remediate the issues, it did not do so, subsequently failing to properly monitor over 50,000 foreign currency wire transfers totaling more than $10 billion," FinCEN stated. The agency also charged that UBS failed to fulfill its obligation to conduct appropriate customer due diligence, particularly in providing services to high-risk clients with ties to Russia and Latin America.
UBS did not immediately respond to a request for comment. FinCEN indicated that as part of the settlement, UBS admitted to willfully violating the Bank Secrecy Act, including failing to implement and maintain an anti-money laundering program and failing to file suspicious activity reports. Separately, the Financial Industry Regulatory Authority fined UBS $20 million on Monday for anti-money laundering violations, also finding that the firm had again failed to establish and implement a compliance program reasonably expected to detect and facilitate the reporting of suspicious transactions involving foreign currency wire transfers. The Commodity Futures Trading Commission also ordered UBS to pay $8 million to settle charges that the firm failed to prudently supervise the configuration and operation of its anti-money laundering transaction monitoring system for foreign currency-denominated wire transfers.
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