UBS’s AML fail showcases two types of recidivist

UBS was fined $125 million by U.S. regulators on August 3 for violating the Bank Secrecy Act, the largest civil fine ever against a broker-dealer for violating the main U.S. anti-money laundering law. The U.S. Department of the Treasury's Financial Crimes Enforcement Network (FinCEN) said UBS Financial Services admitted to willfully violating the BSA by failing to implement and maintain an anti-money laundering program and by failing to file suspicious activity reports. “Today’s announcement brings closure to this legacy matter,” a UBS spokesperson said. “UBS has cooperated fully with its regulators and has made significant investments to remediate and strengthen its AML program in line with leading industry practices.” “Today’s historic action against UBSFS should send a clear message that recidivist financial institutions will face severe repercussions,” FinCEN Director Andrea Gacki said in a statement. Why so blasé? It’s not as if UBS doesn’t have previous in terms of run-ins with Uncle Sam – in 2009 the bank entered into a deferred prosecution agreement with the [Department of Justice](https://www.justice.gov/archives/opa/pr/ubs-enters-deferred-prosecution-agreement) for helping clients conceal income from the IRS. UBS boss Sergio Ermotti will know that these sorts of process failures sit awkwardly with his calls for a [pragmatic approach](https://www.ubs.com/global/en/our-firm/2025/ermotti-switzerland-open-letter.html) to capital adequacy. And regulators take a dim view of repeat offenders: in 2017, the Federal Reserve imposed a $41 million penalty and cease-and-desist order on Deutsche Bank for AML weaknesses, but a [$186 million](https://www.federalreserve.gov/newsevents/pressreleases/enforcement20230719a.htm) one in 2023 when further lapses occurred. The wider problem is that the regulators are not carrying a very big stick. In 2023 Deutsche Bank had a €1.3 trillion balance sheet and made €29 billion of revenue. As of last year UBS had a $1.6 trillion balance sheet and $50 billion of group revenue. Its latest fine is only 1% of the net income analysts anticipate for 2026, according to Visible Alpha, and the bank may get to shave $15 million off if FinCEN accepts that its AML processes have improved. Instead of establishing deterrence, fines therefore just seem like the cost of doing business. U.S. regulators could return to the days of bumper penalties, like the $9 billion one meted out for sanctions violations by BNP Paribas in 2014. They could also wave these sorts of failures in the faces of bank chiefs who call for a rollback of regulations. More likely, they will end up instead having to deal with yet more repeat offenders. The upshot: during the four years to June 2023, UBS failed to adequately monitor 61,500 foreign-currency wire transactions worth over $10.5 billion – including ones involving high-risk locations like Russia and Venezuela. Then there were customer due diligence failures that meant, for example, a Russian oligarch with close ties to Vladimir Putin was allowed to be the beneficiary of UBS accounts despite news coverage questioning the origins of his money. And FinCEN also says senior executives and UBS head office knew within weeks of the 2018 order that the projected timetable would slip, yet UBSFS didn’t let it know. UBS **UBSG.S** now officially warrants the R word. The Swiss bank on Monday received a [$125 million fine](https://www.fincen.gov/system/files/2026-07/UBS-Consent-Order.pdf) from U.S. authorities for “recidivist” failures – its U.S. broker-dealer messed up anti-money laundering controls not once, but twice. Still, as big a problem is that bank regulators are repeat offenders too. Back in 2018 the U.S. Treasury's Financial Crimes Enforcement Network (FinCEN) fined U.S.-based UBS Financial Services $14.5 million for inadequate monitoring of clients’ foreign-currency payments. UBS said new and improved processes would be in place by mid-2019. In fact, these only went live in March 2021 - and even then, the underlying deficiencies persisted into 2023.

UBS’s AML fail showcases two types of recidivist

Context from FinCEN and UBS

Regulators, penalties and deterrence

Persistent monitoring and due diligence lapses

UBS fined for repeated anti-money laundering failures

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