UBS Financial Services has been hit with a $125 million penalty from FinCEN for willfully violating Bank Secrecy Act requirements, part of a coordinated enforcement action with the SEC, FINRA, and CFTC targeting anti-money laundering failures. The Swiss bank admitted to inadequate monitoring of foreign-currency wire transfers between January 2019 and June 2023, failing to properly review thousands of FX transactions despite prior warnings.
The enforcement follows a 2018 FinCEN consent order addressing similar deficiencies. UBS initially used flawed manual quarterly reports, then introduced an automated system in 2021 that created new problems including incomplete data feeds and missing transaction labels. FINRA found more than 60,000 FX wires worth over $10 billion went unmonitored, with roughly one-third of retail FX wires omitted after automation.
UBS will pay $62 million immediately, with $15 million potentially waived upon completing remediation work. Combined nominal penalties across all regulators totaled $173 million, though credits reduce actual cash outlay.
FXnCO Insight
Repeat AML violations at major institutions signal heightened regulatory scrutiny of FX wire monitoring systems, particularly following technology implementations.
Source: Finance Magnates