“History does not repeat itself, but it often rhymes.”
– Mark Twain

Dear Friends and Supporters,

I hope you are all well and that my fellow Bahamians have enjoyed the Emancipation Day long weekend.

On Emancipation Day, as I was sharing our greeting card celebrating it with our friends and supporters in the Bahamas, another significant piece of financial news broke.

“Chance is perhaps the pseudonym of God when He did not want to sign.”
– Anatole France

The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) announced a historic US$125 million civil penalty against UBS Financial Services Inc. Together with parallel enforcement actions by FINRA, the SEC and the CFTC, the total financial penalties reached US$173 million.

“Today’s historic action against UBSFS should send a clear message that recidivist financial institutions will face severe repercussions,” said FinCEN Director Andrea Gacki. “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.”

According to the official findings, UBS repeatedly failed to comply with its obligations under the Bank Secrecy Act, despite having entered into an earlier Consent Order with FinCEN in 2018 requiring the bank to strengthen its controls.

For me, however, one aspect of the Consent Order stood out.

While UBS was assuring U.S. regulators that it was strengthening its internal controls and compliance procedures, our evidence shows that, during the same period, UBS was producing records which we say falsely represented trades that had never reached Nasdaq. In November 2018, UBS produced 51 records purporting to evidence the execution of our trades. Those records, in our view, could not lawfully have been issued by UBS AG as evidence of executions on the U.S. markets and remain central to our twelve-year litigation before the Supreme Court of The Bahamas.

The timing is difficult to ignore.

It is also difficult not to ask whether the deficiencies identified by U.S. regulators, together with the evidence we have gathered over more than a decade, may reflect something far broader than isolated compliance failures.

Another point deserves attention.

In my opinion, UBS’s own internal procedures governing the execution of customer trades deserve careful examination. They form an important part of the evidence supporting what we have described throughout these years as the Fictitious Trading Scheme. I invite readers to examine the execution manuals for themselves and reach their own conclusions. (link)

The official U.S. findings concern anti-money laundering obligations. Our litigation concerns trade execution, the integrity of market records and what we allege to be the long-running Fictitious Trading Scheme. These are different matters.

Nevertheless, after reading the Consent Order, I cannot help wondering whether both point to the same underlying corporate culture—one in which internal procedures repeatedly failed to deliver the transparency, accuracy and accountability that clients, regulators and financial markets are entitled to expect.

The numbers alone are remarkable.
Authority Civil Penalty
FinCEN US$ 125 million
CFTC US$ 20 million
SEC US$ 20 million
FINRA US$ 8 million
Total US$ 173 million

Based on approximately 62,000 transactions representing US$10.5 billion in value, the combined penalties amount to approximately US$2,790 per transaction, or approximately US$16,476 for every US$1 million in transactions.

After twelve years of litigation, I have more hope than ever that our evidence will finally receive the careful examination it deserves.

As always, I encourage every reader not to accept anyone’s conclusions—including mine—without examining the original documents. Read the FinCEN Press Release. Read the Consent Order. Read the evidence we have published. Then decide for yourself.

“The truth never damages a cause that is just.“
– Mahatma Gandhi

Thank you for visiting Let’s Make the World Fairer.

If you believe that financial markets should be transparent, accountable and fair, please continue to support our work by visiting and sharing our website, signing and sharing our petition, and helping ensure that our evidence is finally examined on its merits.

With sincere gratitude,

Irina