UBS Financial Services Pays $125M To Settle FinCEN Charges of BSA Violations
By the Constantine LLP Whistleblower Team
On August 3, the Department of Treasury’s Financial Crimes Enforcement Network (FinCEN) announced that UBS Financial Services Inc. would pay $125 million for violating the Bank Secrecy Act (BSA).[1] It is the largest penalty ever imposed against a broker-dealer for BSA violations.
How Did UBS Violate the Bank Secrecy Act?
The BSA is the principal U.S. statute that imposes on financial institutions certain recordkeeping, reporting, and anti-money laundering compliance obligations. It is designed to help the Government prevent money laundering, terrorist financing, and other financial crimes.
In December 2018, UBS paid a $14.5 million penalty for violating the BSA by failing to adequately monitor foreign currency wires. As part of the Consent Order, UBS was supposed to address the weaknesses in its automated monitoring system that led to the BSA compliance violations. According to FinCEN, UBS failed to do so, allowing roughly 50,000 foreign currency wires worth more than $10 billion to go essentially unmonitored. FinCEN took issue not only with this compliance gaffe, but also with UBS failing to disclose it. FinCEN uncovered it only through its own investigation following a regulatory examination.
In addition to the failures with properly monitoring foreign currency wires, UBS also failed to comply with its customer due diligence obligations, especially with respect to high-risk customers connected to Russia and Latin America. FinCEN found numerous instances where UBS did not take appropriate steps to mitigate the risks associated with these accounts even when UBS was on notice that these customers had alleged ties to corruption, fraud, and money laundering. As a result, UBS failed to timely report hundreds of suspicious transactions.
In announcing the enforcement action, FinCEN made very clear its commitment to going after these types of BSA violations, especially for companies with a prior history of such failures. In fact, FinCEN Director Andrea Gacki underscored how this “historic action . . . should send a clear message that recidivist financial institutions will face severe repercussions,” and that “repeat violators of the Bank Secrecy Act jeopardize the integrity of our financial system, especially those that expose it to high-risk customers and activities without effective controls.”
What Role Can Whistleblowers Play in Reporting Bank Secrecy Act Violations?
There is no indication of whether a whistleblower was involved in this enforcement matter, and given FinCEN’s commitment to protecting the identity of its whistleblowers, the agency would be unlikely to ever disclose the involvement of any whistleblowers. However, in announcing the historic penalty against UBS, FinCEN made it clear it wants to hear from whistleblowers with information of potential BSA violations.
In fact, it specifically highlighted the FinCEN Whistleblower Program under which individuals reporting such violations can receive up to 30% of the Government’s recovery from any resulting enforcement action. The program generally covers reporting anti-money laundering (AML) violations under the BSA and sanctions violations under the various statutes that prevent doing business with sanctioned entities. FinCEN runs the whistleblower program and enforces the BSA, while the Office of Foreign Assets Control (OFAC) enforces the sanctions statutes.
In a February 2026 bulletin, FinCEN identified the most common AML and sanctions violations whistleblowers should watch out for.[2] Two of the key areas involve (i) financial institutions failing to perform adequate due diligence or lacking proper controls to detect suspicious transactions or those especially prone to fraud, and (ii) companies doing business in a sanctioned jurisdiction or with a sanctioned entity.
As we previously reported, FinCEN has been accepting whistleblower tips and submissions since it launched the program just a few years ago, however, the agency has yet to formalize the rules and regulations governing the program. That is about to change with FinCEN’s Proposed Rulemaking which, when finalized, will provide whistleblowers and their counsel with a clear roadmap of the steps a whistleblower must follow under the program to be eligible for an award.
Constantine LLP submitted an exhaustive set of comments and recommendations in May as part of the Rulemaking. In particular, the firm “focused on ensuring that whistleblowers are best protected and incentivized in coming forward given the significant risks they face of retaliation and social isolation for doing so.”
When Will FinCEN Start to Issue Awards Under Its Whistleblower Program?
The Proposed Rulemaking is FinCEN’s final step before it begins to issue awards under the whistleblower program. On the dedicated whistleblower website it launched in February, FinCEN makes that clear, noting “once that regulation is finalized, FinCEN will begin processing and paying awards.”[3] At the time, Treasury Secretary Scott Bessent highlighted the agency’s appetite for rewarding whistleblowers once the program is finalized: “We are going to offer whistleblower payments to anyone who wants to tell us the who, what, when, where, and how this fraud and money laundering has occurred.”[4]
In announcing the Proposed Rulemaking in March, Secretary Bessent was equally enthusiastic about the whistleblower program and the promise of rewards to come: “As promised, Treasury will reward whistleblowers who provide timely, actionable information on fraud, sanctions violations, and other significant illicit finance activity. . . . At Treasury, we follow the money, and we strongly encourage individuals to come forward with credible tips to help safeguard our financial system.”[5]
Constantine LLP whistleblower partner Marlene Koury, who has significant experience representing AML and sanctions whistleblowers before FinCEN, looks to this series of recent developments as a clear sign the agency is poised to issue its first whistleblower awards under the program soon. Pointing to the website launch, the bulletin on common violations, the Proposed Rulemaking, and the multiple statements hailing the program and whistleblowers more broadly, Koury expects the first awards within the coming year.
“It really depends on how the final rules come out and the timeline they establish for the award application process,” Koury says. “But given the proposed rules, which largely follow the SEC Whistleblower Program, and the obvious push FinCEN is making to promote the program, I would expect the agency to issue its first awards next year.”
Koury adds, “this is a high priority enforcement area for the current Administration and nothing makes a bigger enforcement splash than a blockbuster or highly promoted whistleblower award.” According to Koury, “making awards under these kinds of whistleblower programs not only encourages other whistleblowers to come forward, it reinforces for companies the importance of strict compliance and the greater risk that the Government will find out if they fail.”
Constantine LLP Has Substantial Experience Representing AML and Sanctions Whistleblowers Under the FinCEN Program
Constantine LLP has substantial experience representing whistleblowers under the FinCEN program, with multiple whistleblower submissions pending before the agency. Koury says the increased activity by FinCEN in promoting its whistleblower program has coincided with an increase in AML/sanctions whistleblowers reaching out to the firm for support and assistance.
So if you have information relating to potential AML and sanctions violations, or what it means to be a whistleblower more broadly, or would like to learn about our many whistleblower successes, please do not hesitate to contact us. We will connect you with an experienced member of our whistleblower team for a free and confidential consultation.
[1] See https://www.fincen.gov/news/news-releases/fincen-assesses-historic-125-million-penalty-against-ubs-financial-services-inc.
[2] See https://www.fincen.gov/system/files/2026-02/owb-whistleblower-bulletin.pdf.
[3] See https://constantinellp.com/whistleblower/calling-all-aml-sanctions-whistleblowers-fincen-wants-to-hear-from-you/.
[4] https://home.treasury.gov/news/featured-stories/treasury-accepting-whistleblower-tips-on-fraud-money-laundering-sanctions-violations?.
[5] See https://www.fincen.gov/news/news-releases/fincen-proposes-rule-pay-whistleblowers.
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