The Commodity Futures Trading Commission today announced an order filing and settling charges against UBS Financial Services Inc., a registered futures commission merchant, for failing to diligently supervise the configuration and operation of its anti-money laundering transaction monitoring systems for wire transfers denominated in foreign currencies (FX).
Under the order, UBS FSI must pay an $8 million civil monetary penalty and cease and desist from further violations of the Commodity Exchange Act and CFTC regulations. The CFTC recognizes UBS FSI’s representations concerning its remediation in connection with this matter.
The order finds from January 2019 through June 2023, due to deficiencies in UBS FSI’s configuration of the relevant surveillance tools and data governance practices, thousands of FX wires sent or received through retail customer commodity accounts the firm held were either insufficiently monitored or omitted from transaction monitoring for AML compliance. For part of the relevant period, UBS FSI used a manually generated report that failed to capture all relevant FX wires for monitoring and was not tailored to identify patterns of suspicious activity in FX wire transactions. UBS FSI was aware of these vulnerabilities because they were the subject of prior enforcement proceedings by other government agencies and a self-regulatory organization. In 2021, UBS FSI transitioned to using an automated system to monitor all wire transactions for suspicious activity. UBS FSI, however, failed to properly configure the data flowing into the new system, causing issues that impacted the efficacy of its suspicious activity monitoring function.
Today the Financial Crimes Enforcement Network of the U.S. Department of the Treasury, the Securities and Exchange Commission, and the Financial Industry Regulatory Authority announced they also filed and settled related actions against UBS FSI.
The CFTC thanks FinCEN, the SEC, and FINRA for their assistance.
