US Financial Crimes Enforcement Network imposes record USD 125 million penalty on UBSFS for willful Bank Secrecy Act violations

The US Financial Crimes Enforcement Network imposed a USD 125 million civil penalty on UBS Financial Services Inc. for willful Bank Secrecy Act violations, the largest penalty imposed on a broker-dealer for such breaches. UBSFS admitted that it failed to implement and maintain an anti-money laundering program and file required suspicious activity reports. The action follows a USD 14.5 million penalty in 2018 and cites UBSFS’s failure to remediate previously identified transaction-monitoring weaknesses. The firm subsequently failed to appropriately monitor more than 50,000 foreign currency wires worth over USD 10 billion and did not disclose the continuing deficiencies to FinCEN. It also failed to conduct appropriate customer due diligence for high-risk customers with ties to Russia and Latin America, resulting in hundreds of suspicious transactions not being reported on time. UBSFS must engage a third party to identify and report previously undetected suspicious transactions and undergo an independent review of its anti-money laundering program, focused on risks involving the US Southwest border and cartels, Iran, Russia and Venezuela. FinCEN will waive up to USD 15 million of the penalty for related expenses if UBSFS satisfactorily completes the review and implements the third party’s recommendations.