UBS Pays $125 Million to Settle US Charges of Repeated AML Failures

Four U.S. regulators have reached separate agreements with UBS Financial Services in which the company will pay a total of $125 million to settle violations of Bank Secrecy Act (BSA) anti-money laundering (AML) and countering the financing of terrorism (CFT) rules.

UBS Financial Services settled charges with the Commodity Futures Trading Commission (CFTC), the Financial Crimes Enforcement Network (FinCEN), FINRA and the Securities and Exchange Commission (SEC).

Reached by PYMNTS, UBS said in an emailed statement: “Today’s announcement brings closure to this legacy matter. UBS has cooperated fully with its regulators and has made significant investments to remediate and strengthen its AML program in line with leading industry practices.”

FinCEN imposed a $125 million civil money penalty on UBS Financial Services and agreed to credit against that total the company’s payments of $48 million to the CFTC, SEC and FINRA, according to a consent order.

The penalty is the largest FinCEN has ever imposed against a broker-dealer for BSA violations, the regulator said in a Monday press release.

FinCEN said in the release that UBS Financial Services did not remediate the underlying issues covered by a December 2018 consent order, failed to appropriately monitor foreign currency wires, did not disclose these failing to FinCEN and failed to comply with its obligations to perform appropriate customer due diligence in connection with high-risk customers with ties to Russia and Latin America.

The December 2018 consent order assessed a $14.5 million fine against UBS Financial Services for willful violations of the Bank Secrecy Act, including the company’s failure to develop and use an appropriate AML system, PYMNTS reported at the time.

“Today’s historic action against UBSFS should send a clear message that recidivist financial institutions will face severe repercussions,” FinCEN Director Andrea Gacki said in the Monday press release. “Repeat violators of the Bank Secrecy Act jeopardize the integrity of our financial system, especially those that expose it to high-risk customers and activities without effective controls.”

The CFTC said in a Monday press release that UBS Financial Services will pay it an $8 million civil monetary penalty and cease and desist from further violations of the Commodity Exchange Act and CFTC regulations. The order settles charges that the company failed to diligently supervise its AML transaction monitoring systems.

FINRA said in a Monday press release that it fined UBS Financial Services $20 million for AML violations after finding that the company failed to implement an adequate AML compliance program and did not reasonably implement its customer due diligence program. FINRA said it fined UBS Financial Services $14.5 million in December 2018 for failing to reasonably monitor foreign currency wires.

The SEC said in a Monday administrative proceeding that UBS Financial Services will pay it $20 million and cease and desist from causing any violations of the Securities Exchange Act.