20 Dec 2018
UBS Financial Services (UBSFS) has agreed to pay $14.5 million in penalties to US regulators after it emerged that it failed to implement sufficient financial crime prevention procedures for over a decade.
For years, UBSFS did not provide sufficient resources to ensure day-to-day anti-money laundering (AML) compliance, according to the Financial Crimes Enforcement Network (FinCEN).
This led to problems such as a backlog of alerts and it also decreased UBSFS’s ability to timely file suspicious activity reports (SARs).
The firm also failed to implement an adequate due diligence program for foreign correspondent accounts.
“Over several years, UBSFS processed through certain of its brokerage accounts hundreds of transactions that exhibited red flags associated with shell company activity,” said FinCEN, which determined that the firm failed to implement an adequate AML program from 2004 to 2017.
UBSFS failed to adequately monitor foreign currency-denominated wire transfers — amounting to tens of billions of dollars — that were conducted through its commodities accounts and retail brokerage accounts.
It added that the firm’s AML monitoring system failed to capture critical information about these foreign currency-denominated wires, including sender and recipient information and the country of origin and destination.
In an emailed statement, UBS said it is ‘pleased to have resolved this matter’ and that it ‘remains fully committed to assisting the government in combating money laundering and other illicit activity.’
Count reading this article to your CPD minutes, by signing up to our CPD WalletFREE CPD Wallet