Securities and banking regulators are continuing to focus on anti-money laundering procedures and policies at firms of all stripes, announcing on Monday that UBS Financial Services Inc., home to more than 6,900 financial advisers, has been fined $14.5 million for failing to run AML programs reasonably designed to monitor high-risk transactions in customer accounts.
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SEC, Finra nab two firms for AML violations)
Both the Securities and Exchange Commission and the Financial Crimes Enforcement Network, a bureau of the U.S. Department of the Treasury, penalized UBS Financial Services $5 million over the matter. The Financial Industry Regulatory Authority Inc. fined the firm $4.5 million, and also hit another group, UBS Securities, with a $500,000 penalty.
The high-risk transactions included foreign currency wire transfers at UBS Financial Services, and transactions in penny stocks at UBS Securities,
according to a statement by Finra.
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. With respect to UBS Securities, from January 2013 to June 2017, the firm failed to reasonably monitor penny-stock transactions that its Swiss parent routed to UBS for execution through an omnibus account, according to Finra.
In settling the AML issues, neither UBS firm admitted to nor denied the charges.
"The firm is pleased to have resolved this matter, which addressed certain legacy anti-money laundering program deficiencies," said company spokesman Peter Stack. "UBS remains fully committed to assisting the government in combating money laundering and other illicit activity."
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Shortcomings in anti-money laundering monitoring and compliance at brokerages has remained a steady focus of securities regulators.
For example, in October, Finra fined LPL Financial $2.75 million for failing to list dozens of customer complaints against its brokers and for not filing hundreds of suspicious activity reports in its anti-money laundering program.
In its 2018 regulatory and examination priorities letter, Finra highlighted anti-money laundering as an area of concern.
