FinCEN Issues Historic USD 125 Million Penalty Against UBS Financial Services

FinCEN has announced a record USD 125 million civil penalty against UBS Financial Services Inc. for willful and repeated violations of the Bank Secrecy Act. This is the largest BSA penalty ever imposed on a broker‑dealer, reflecting what FinCEN described as recidivist non‑compliance.

The action follows UBS’s failure to remediate issues identified in a 2018 consent order, where the firm was fined USD 14.5 million for weaknesses in its automated monitoring of foreign‑currency wire transfers. Despite assurances that the gaps would be fixed, UBS did not implement effective controls and subsequently failed to monitor more than 50,000 foreign‑currency wires worth over USD 10 billion between 2019 and 2023. FinCEN learned of these failures only through a later investigation.

FinCEN also found significant customer due diligence deficiencies, particularly involving high‑risk clients with ties to Russia and Latin America, including cases where negative news reports flagged corruption, fraud, or money‑laundering concerns. UBS failed to appropriately assess these risks and did not file hundreds of suspicious activity reports in a timely manner.

UBS admitted to willfully violating the BSA, including failing to maintain an adequate AML program and failing to file required suspicious activity reports. Parallel actions were announced by the SEC, FINRA, and the CFTC, with penalties of USD 20 million, USD 20 million, and USD 8 million respectively, credited toward the FinCEN total.

FinCEN Director Andrea Gacki stated that the penalty sends a clear message that repeat violators will face severe consequences, particularly when institutions expose the financial system to high‑risk customers and activities without effective controls.

As part of the settlement, UBS must engage an independent consultant to conduct a SAR lookback and review its AML program, with a focus on priority illicit‑finance risks including Russia, Iran, Venezuela, cartels, and U.S. Southwest border activity.

Source: https://www.fincen.gov/news/news-releases/fincen-assesses-historic-125-million-penalty-against-ubs-financial-services-inc