The Financial Industry Regulatory Authority fined UBS Financial Services $4.5 million and UBS Securities LLC $500,000 for failing to establish and implement anti-money laundering programs reasonably designed to monitor certain high-risk transactions in customer accounts.
The high-risk transactions included foreign currency wire transfers at UBS Financial Services, and transactions in penny stocks at UBS Securities.
The Securities and Exchange Commission and the Financial Crimes Enforcement Network, a bureau of the Treasury Department, also announced that UBS Financial Services agreed to pay a $5 million penalty to each of these agencies in separate actions for AML violations.
“When firms are part of global operations involving high-risk international securities trades and money movements, it is critical that they design and implement an AML program tailored for their business model,” Susan Schroeder, FINRA’s executive vice president of the department of enforcement, said in a statement.
From January 2004 to April 2017, UBS Financial Services processed thousands of foreign currency wires for billions of dollars without sufficient oversight, according to FINRA.
UBS Financial Services’ AML surveillance systems failed to reasonably monitor billions of dollars in foreign currency wires flowing through customer accounts, including hundreds of millions of dollars in foreign currency wires to and from countries known to be at high risk for money laundering.