FinCEN Assesses $14.5 Mln Penalty Over UBSFS' Anti-Money Laundering Failures

(RTTNews) - The Financial Crimes Enforcement Network or FinCEN announced an assessment against UBS Financial Services, Inc. or UBSFS, a division of Swiss banking giant UBS Group AG (UBS), for anti-money laundering failures.

FinCEN assessed a $14.5 million civil money penalty, of which $5 million will be paid to the U.S. Department of the Treasury. The remainder will be concurrent with penalties for similar or related conduct imposed by the Securities and Exchange Commission or SEC and the Financial Industry Regulatory Authority or FINRA.

In a statement, the agency noted that UBSFS failed to develop and implement an appropriate, risk-based anti-money laundering or AML 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.

As a full-service broker-dealer, UBSFS is required to establish and implement an AML program, as well as perform periodic reviews of its correspondent accounts for foreign financial institutions. FinCEN determined that from 2004 to 2017, UBSFS failed to implement an adequate AML program and failed to implement an adequate due diligence program for foreign correspondent accounts.