UBS hit with record $125M fine for money laundering violations

The U.S. Treasury Department imposed a record $125 million civil fine on UBS ↗ 1.35% Financial Services on Monday for what regulators called willful violations of the Bank Secrecy Act, the nation's primary anti-money laundering law.

Largest Broker-Dealer Penalty

The penalty, issued by the Treasury's Financial Crimes Enforcement Network (FinCEN), is the largest ever levied against a broker-dealer for Bank Secrecy Act violations, according to the department. FinCEN labeled UBS a recidivist, noting the firm had been fined $14.5 million in 2018 for failing to adequately monitor foreign currency wires.finance.yahoo+2

Despite assurances to regulators that it would address the underlying problems, UBS failed to appropriately monitor more than 50,000 foreign currency wires totaling over $10 billion, or disclose its failings, FinCEN said.amlintelligence+1

As part of the resolution, UBS Financial Services admitted that it willfully violated the BSA, including failing to implement and maintain an anti-money laundering program and file suspicious activity reports.amlintelligence

Regulators Issue Warning

FinCEN Director Andrea Gacki framed the action as a warning to the broader financial industry. "Today's historic action against UBSFS should send a clear message that recidivist financial institutions will face severe repercussions," Gacki said in a statement.reuters+1

"Financial institutions that continue to violate the BSA jeopardize the integrity of our financial system, especially those that expose it to high-risk customers and activities without effective controls," she added.amlintelligence

UBS Response

UBS characterized the fine as resolving a legacy issue. "Today's announcement brings closure to this legacy matter," the firm 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."marketscreener+1