By Jonathan Stempel
NEW YORK, Aug 3 (Reuters) – UBS was fined $125 million by U.S. regulators on Monday for violating the Bank Secrecy Act, the largest civil fine ever against a broker-dealer for violating the main U.S. anti-money laundering law.
The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) said UBS Financial Services admitted to willfully violating the BSA by failing to implement and maintain an anti-money laundering program and by failing to file suspicious activity reports.
Monday’s settlement reflected UBS’ status as a repeat offender, after the Swiss bank failed to address problems that led to a $14.5 million fine by FinCEN in December 2018. The alleged subsequent violations occurred between January 2019 and June 2023.
UBS’ settlement resolved related accusations by the Securities and Exchange Commission, the Commodity Futures Trading Commission, and the Financial Industry Regulatory Authority.
In a statement, UBS said it cooperated with regulators and has made significant investments to strengthen its anti-money laundering program “in line with leading industry practices.”
REGULATORS FLAG POSSIBLE RUSSIA TIES
Regulators said UBS failed to conduct appropriate due diligence of customers, especially high-risk customers with ties to Russia and Latin America.
One, a Russian oligarch with close ties to Russian President Vladimir Putin, allegedly opened and maintained accounts at UBS despite media reports questioning how he amassed his wealth, and linking him to possible money laundering as well as a company “actively invested” in Iranian digital assets.
UBS was also accused of failing to appropriately monitor more than 60,000 foreign-currency wires totaling more than $10 billion. The 2018 fine addressed similar shortfalls.
The settlement requires UBS Financial Services to hire an outside consultant to review its anti-money laundering program and focus on “priority illicit finance risks.”
These include the U.S. Southwest border, cartels, and possible narcotics trafficking, as well as Iran, Russia and Venezuela, FinCEN said.
“Today’s historic action against UBSFS should send a clear message that recidivist financial institutions will face severe repercussions,” FinCEN Director Andrea Gacki said in a statement.
(Reporting by Jonathan Stempel in New York; Additional reporting by Doina Chiacu; Editing by David Ljunggren, David Holmes, Rod Nickel)
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