Swiss bank and global wealth manager UBS Financial Services Inc. was hit with a $125 million civil money penalty by the Financial Crimes Enforcement Network (FinCEN) for willful violations of the Bank Secrecy Act (BSA), the primary U.S. anti-money laundering law.
This is the largest BSA penalty ever assessed by FinCEN, a division of the U.S. Treasury Department. Combined with FINRA, Securities and Exchange Commission, and Commodity Futures Trading Commission sanctions, total regulatory penalties reached $173 million, according to a statement from FinCEN.
The scope of the current violation is failure to properly monitor over 50,000 foreign currency wires totaling more than $10 billion between January 2019 and June 2023. UBS also didn’t disclose its failings, FinCEN said.
Sending a Message to Repeat Offenders
UBS settled similar anti-money laundering monitoring charges with FinCEN in 2018, paying $14.5 million in fines for failing to adequately monitor foreign currency wires.
“Today’s historic action against UBSFS should send a clear message that recidivist financial institutions will face severe repercussions,” said FinCEN Director Andrea Gacki.
“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,” Gacki added.
Customers With Suspected Ties to Russia, Latin America
UBSFS also failed to perform appropriate customer due diligence (CDD), FinCEN said, particularly in connection with “high-risk customers with ties to Russia and Latin America.”
Instances were discovered during the investigation that UBS failed to “mitigate money laundering and other illicit finance risks” when it should have known about them and promptly reported them. The bank’s failure to report “hundreds of suspicious transactions” in a timely manner prevented law enforcement from receiving critical information, according to FinCEN.
UBS Admits Guilt
As part of its resolution with FinCEN, UBSFS admits that it willfully violated the BSA, including failing to implement and maintain an AML program and file suspicious activity reports.
“Today’s announcement brings closure to this legacy matter,” UBS said in a statement. “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.”
UBS is required to work with a third party and file a report to FinCEN on suspicious transactions that went undetected. The Swiss bank must also undergo an independent review of its AML program.
For additional information regarding the facts and circumstances associated with this enforcement action, including the specific BSA violations and the underlying conduct, please see the Consent Order between FinCEN and UBSFS.
About FinCEN
The Financial Crimes Enforcement Network, a bureau of the U.S. Department of the Treasury, fights money laundering, stops terrorist financing, and protects the financial system from illegal use. FinCEN investigates tax evasion, fraud, drug cartels, and international corruption.
It manages rules requiring banks and businesses to report large or suspicious cash transactions and gathers and analyzes data on financial flows to help local, state, and federal law enforcement track criminals. FinCEN also implements transparency rules under the Corporate Transparency Act to identify the real people who own or control companies.
About UBS
UBS is the world’s largest private wealth manager, handling trillions of dollars in client assets. Formed in June 1998 through the merger of Union Bank of Switzerland and Swiss Bank Corporation, it significantly expanded in 2023 after acquiring Credit Suisse for $3.2 billion.
Headquartered in Zurich and Basel, Switzerland, UBS is a multinational financial services firm providing wealth management, investment banking, and asset management. It employs over 100,000 worldwide and manages over $7 trillion in invested assets globally. It serves roughly half of the world’s billionaires.
