The Federal Reserve on Monday fined Switzerland's largest bank, UBS AG, $100 million for allegedly sending dollars to Cuba, Libya, Iran and Yugoslavia in violation of U.S. sanctions against those countries.

UBS operated a trading center for dollars in its Zurich headquarters under contract with the Federal Reserve of New York, to help the circulation of new U.S. notes and the retirement of old ones. One condition was that the Swiss bank not deliver or accept dollar notes through the depot to or from banks in countries that are under U.S. trade sanctions.

In an announcement, the Fed said that UBS had violated the agreement and that some former bank officers and employees, whom it did not name, concealed the transactions by falsifying UBS' monthly reports to the U.S. central bank. The individuals were not part of the order issued Monday, in which UBS agreed to pay a $100 million civil fine without admitting to the allegations.

The bank said Monday that some employees have been dismissed and disciplinary measures were taken against others.

The violations allegedly occurred throughout the duration of UBS' contract with the New York Fed, from 1996 through October 2003, when the Fed terminated it.

The Swiss Federal Banking Commission reprimanded UBS and said it will inspect its operations to ensure that corrective actions are effective.

Unlike the Fed, the Swiss agency does not have the power to impose fines in such cases.

"UBS recognizes that very serious mistakes were made, accepts the sanctions and expresses its regret," the bank said. "It has already instituted corrective and disciplinary measures and has decided to exit the international banknote trading business."

The Treasury Department's Office of Foreign Assets Control, or OFAC, which enforces U.S. trade embargoes, is investigating the UBS case to determine whether action needs to be taken against any Americans who might have been involved.

Roughly two-thirds of the $669 billion in U.S. currency circulates overseas. Five other financial institutions - American Express, Bank of America, London-based HSBC, Royal Bank of Scotland and United Overseas Bank of Singapore- operate a total of eight such trading centers, known as Extended Custodial Inventory facilities, in Europe and Asia under contract with the Fed.

In previous cases involving foreign banks that were accused of deceiving the Fed, the central bank fined collapsed Bank of Credit and Commerce International $200 million in 1992 for allegedly concealing its ownership of First American Bank in the United States, and fined France's Credit Lyonnais $100 million last December in connection with its illegal acquisition of California insurance company Executive Life.

UBS recently reported that its first-quarter profit doubled from a year earlier, to 2.42 billion Swiss francs ($1.89 billion). It owns UBS Financial Services, a major Wall Street investment firm.

UBS' U.S.-traded shares fell $2.17, or about 3 percent, to close at $68.89 Monday on the New York Stock Exchange.