UBS Financial Services to Pay $15M for AML Failings
Friday, December 21, 2018 7:50 AM

The Financial Crimes Enforcement Network (FinCEN) announced Monday that it has assessed a $14.5 million civil money penalty on UBS Financial Services, Inc., of which $5 million will be paid to the U.S. Treasury, and the balance will be concurrent with $9.5 million of the $10 million in penalties imposed for similar or related conduct by the Securities and Exchange Commission and the Financial Industry Regulatory Authority.

FinCEN said UBSFS failed to develop and implement an appropriate, risk-based anti-money laundering program that adequately addressed the risks associated with accounts that included both traditional brokerage and banking-like services. UBSFS failed to implement appropriate policies and procedures to ensure the detection and reporting of suspicious activity through all accounts—particularly for those accounts that exhibited little to no securities trading. The firm did not adequately structure its AML program to address the use of securities accounts for the purpose of moving funds rather than trading securities.

FinCEN also said that, over several years, UBSFS processed through certain of its brokerage accounts hundreds of transactions that exhibited red flags associated with shell company activity. UBSFS failed to adequately monitor foreign currency-denominated wire transfers—amounting to tens of billions of dollars—that were conducted through its commodities accounts and retail brokerage accounts. UBSFS’s AML monitoring system failed to capture critical information about these foreign currency-denominated wires, including sender and recipient information and the country of origin and destination. As a result, it was unable to identify and investigate potentially suspicious transactions based on the presence of important risk factors, such as jurisdiction and the involvement of politically exposed persons.

Source:  FinCEN