WASHINGTON – In a historic enforcement action, FinCEN fines UBS $125 million for intentional violations of the Bank Secrecy Act (BSA). The Financial Crimes Enforcement Network (FinCEN) imposed this major civil penalty on UBS Financial Services Inc. due to repeated compliance failures. This is the largest fine ever handed to a brokerage firm under the BSA.
“Today’s historic action against UBSFS sends a loud and clear message: repeat offenders will face severe consequences,” stated Andrea Gacki, Director of FinCEN. “Institutions that repeatedly break the Bank Secrecy Act endanger our entire financial system. This is especially true when they expose it to high-risk clients without real oversight.”
This action marks FinCEN’s second major enforcement against UBSFS. Back in December 2018, UBSFS signed a consent agreement with FinCEN over similar violations. At that time, the firm paid a $14.5 million civil fine. Regulators found that UBSFS failed to properly monitor foreign currency transfers due to flaws in its automated system. Although the firm promised to fix these issues quickly, it failed to do so. As a result, over 50,000 foreign currency transfers worth more than $10 billion went largely unmonitored. On top of that, UBSFS kept these gaps quiet. FinCEN only discovered them during a follow-up inquiry triggered by a routine audit.
Additionally, UBSFS failed to meet Customer Due Diligence (CDD) standards. This was especially true when offering services to high-risk clients connected to Russia and Latin America. FinCEN’s investigation uncovered multiple issues. UBSFS failed to evaluate or limit money laundering risks linked to the source of these clients’ wealth. The firm also overlooked negative reports linking some clients to corruption, fraud, and illicit schemes. This happened even after one of UBSFS’s own subsidiaries raised internal red flags. Because of these systemic failures, UBSFS failed to report hundreds of suspicious transactions on time. This kept vital information out of the hands of law enforcement.
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