The U.S. brokerage division of Swiss banking giant, UBS Financial Services Inc., has been hit with a record penalty by the U.S. Treasury for repeat violations of anti-money laundering rules — coupled with parallel sanctions by the other financial regulators.
The U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) imposed a US$125-million penalty against UBS for breaching AML requirements — the largest penalty to date against a broker-dealer for these violations.
Previously, in 2018, FinCEN settled an enforcement action against UBS for violating AML rules by failing to properly monitor foreign currency wires, among other breaches. In that settlement, the firm pledged to correct these failings, but FinCEN said that it failed to fix its issues, and didn’t report this to FinCEN, which discovered them during a compliance exam. It also found other failings, including failing to perform appropriate due diligence with certain high-risk clients.
Along with the record financial penalty, the latest settlement also requires UBS to work with an outside firm to identify and report any suspicious transactions that previously went undetected. It must also undertake an independent review of its AML compliance program.
At the same time, UBS was also sanctioned by the U.S. Commodity Futures Trading Commission (CFTC), the U.S. Securities and Exchange Commission (SEC), and the U.S. Financial Industry Regulatory Authority (FINRA).
FINRA fined UBS US$20 million for repeat AML violations. The firm settled FINRA’s allegations without admitting or denying its findings.
It also agreed to pay a US$20-million penalty to the SEC and a US$8-million penalty to the CFTC.