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FinCEN fines UBS Financial Services $15M for anti-money laundering failures


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FinCEN fines UBS Financial Services $15M for anti-money laundering failures

The Financial Crimes Enforcement Network imposed a $14.5 million civil money penalty on UBS Financial Services Inc. for not developing an appropriate anti-money laundering program as required under the Bank Secrecy Act.

Of the $14.5 million penalty, $5.0 million will be paid to U.S. Treasury Department, and the rest will go to the Securities and Exchange Commission and the Financial Industry Regulatory Authority.

FinCEN said that from 2004 to 2017 UBS Financial Services did not implement adequate AML and due diligence programs for foreign correspondent accounts. The company also failed to provide sufficient resources for its programs, including inadequate staffing, which led to delays in filing suspicious activity reports.

UBS Financial Services was also assessed for not implementing policies to detect suspicious activities, particularly those that involve little to no securities trading, and not structuring its AML program adequately to address securities accounts used for moving funds instead of trading securities.

The regulatory authority said that over several years, UBS Financial Services processed hundreds of transactions exhibiting red flags associated with shell company activity. The company's AML monitoring system was not able to capture critical information about these foreign-currency-denominated wires, with amounts reaching to the tens of billions of dollars.

FinCEN acknowledged in the release that the company has made significant investments in improving its compliance programs. FinCEN also acknowledged its close coordination with the SEC and FINRA on the settlement.