UBS Financial Services agreed to pay $125 million to settle U.S. regulators' claims that it willfully violated the Bank Secrecy Act, the largest civil penalty ever levied against a broker-dealer under the primary anti-money laundering statute. The Financial Crimes Enforcement Network announced the settlement on Aug. 3, covering failures that persisted from January 2019 through June 2023, years after a prior enforcement action should have forced a fix.
Repeat offender status drives the penalty
The fine reflects UBS's status as a repeat offender. FinCEN had already penalized the firm $14.5 million in December 2018 for similar anti-money laundering program deficiencies. Instead of remedying those gaps, the bank allowed them to fester for another four and a half years, a period during which it also failed to file suspicious activity reports and neglected due diligence on high-risk customers.
Russia ties and $10 billion in unwatched wires
Regulators highlighted one Russian oligarch with reported ties to President Vladimir Putin who maintained accounts at UBS despite public scrutiny over his wealth and links to a company allegedly invested in Iranian digital assets. The firm also failed to appropriately monitor more than 60,000 foreign-currency wires totaling over $10 billion, a blind spot that echoed the very shortcomings cited in the 2018 order.
Settlement terms and the message
The resolution also satisfies related claims from the SEC, CFTC, and FINRA. UBS said it cooperated and has invested significantly to strengthen its program "in line with leading industry practices." As part of the settlement, an outside consultant must now review the AML framework with a focus on priority illicit finance risks including the U.S. Southwest border, cartels, narcotics trafficking, Iran, Russia, and Venezuela. FinCEN Director Andrea Gacki said the action should signal that recidivist institutions face severe repercussions.