Singapore shuts Swiss private bank related to 1MDB- Nikkei Asian Review money laundering act 2007

The actions will likely pile pressure on other authorities, including the U.S. And malaysia investigating 1malaysia development berhad, which has been embroiled in a scandal involving prime minister najib razak for the past year.

The monetary authority of singapore, the de facto central bank, said in a statement it had served a closure notice to the local branch of BSI bank for mismanagement, the first such case since 1984.

Separately, the office of the attorney general of switzerland also announced it had initiated criminal proceedings against the bank’s parent in relation to a series of complex fund transfers for its client, 1MDB. The announcements led to the immediate resignation of stefano coduri, BSI bank’s group chief executive, according to news reports.

MAS said its decision to withdraw the merchant bank status of BSI bank was made after months of investigations into its operations revealed multiple breaches of anti-money laundering regulations and a pervasive pattern of non-compliance.Money laundering act 2007

The statement did not name 1MDB but an MAS spokesperson told the nikkei asian review those actions taken on BSI bank arose from serious lapses by the bank in connection with suspicious transactions and relationships, including with 1MDB-related entities and broader failings in management oversights.

Singapore’s BSI bank was served notices of shortcomings in 2011 and 2014 in relation to risk management and internal controls, which it had rectified. The latest probe by the singapore authority showed management oversight that led to breaches of anti-money laundering regulations, leading to penalties amounting to 13.3 million singapore dollars ($9.6 million) for 41 breaches of the central bank notice.

BSI bank is the worst case of control lapses and gross misconduct that we have seen in the singapore financial sector, said ravi meno, MAS’s managing director.Money laundering act 2007

Facing prosecution

Several bank staff were found to have committed wilful act[s] of misconduct, including deceiving auditors, faking asset valuation and taking instructions from a third party in relation to customers’ accounts.

MAS said six members of the bank’s senior management have been referred to the public prosecutor for further actions which may include criminal proceedings. One of the six, yeo jiawei, a former wealth planner at the bank is currently under remand for various offenses.

Swiss financial market supervisory authority, or FINMA, also found BSI bank committed serious breaches of money-laundering laws.

In one case of 1MDB, [BSI bank] executed numerous large transactions with unclear purpose over a period of several years and, despite clearly suspicious indications, did not clarify background to these transactions, FINMA said in a statement.Money laundering act 2007

In a response, 1MDB said in a statement that it had not been contacted by any foreign authority but would remain committed to cooperating .

The latest announcements may lead to more revelations by authorities in the U.S. And several countries investigating 1MDB. In malaysia, pressure would pile on the central bank, which had closed investigations last month following an undisclosed sum of penalty meted on the fund for inadequate disclosures pertaining to a $1.83 billion investment abroad.

Established in lugano in 1873, BSI is one of the oldest swiss banks specializing in private wealth management. Following an acquisition by brazil’s BTG patual in 2015, ownership at the bank changed hands again recently to EFG international.

Zurich-based EFG is a listed global private banking group. Post-acquisition, the group had combined assets under management of 170 billion swiss francs ($171 billion) and 860 client relationship officers, making it one of the largest swiss private banks.Money laundering act 2007

1MDB has emerged as the largest customer to BSI bank and the bank’s management made little effort to query its complex transactions, including above average fees charged for institutional services rendered to the fund.

Established in 2009, the fund is the brainchild of prime minister najib, who until recently was chairman of its advisory board.

Mayuko tani in singapore contributed to this article.

The actions will likely pile pressure on other authorities, including the U.S. And malaysia investigating 1malaysia development berhad, which has been embroiled in a scandal involving prime minister najib razak for the past year.

The monetary authority of singapore, the de facto central bank, said in a statement it had served a closure notice to the local branch of BSI bank for mismanagement, the first such case since 1984.

Separately, the office of the attorney general of switzerland also announced it had initiated criminal proceedings against the bank’s parent in relation to a series of complex fund transfers for its client, 1MDB.Money laundering act 2007 the announcements led to the immediate resignation of stefano coduri, BSI bank’s group chief executive, according to news reports.

MAS said its decision to withdraw the merchant bank status of BSI bank was made after months of investigations into its operations revealed multiple breaches of anti-money laundering regulations and a pervasive pattern of non-compliance.

The statement did not name 1MDB but an MAS spokesperson told the nikkei asian review those actions taken on BSI bank arose from serious lapses by the bank in connection with suspicious transactions and relationships, including with 1MDB-related entities and broader failings in management oversights.

Singapore’s BSI bank was served notices of shortcomings in 2011 and 2014 in relation to risk management and internal controls, which it had rectified. The latest probe by the singapore authority showed management oversight that led to breaches of anti-money laundering regulations, leading to penalties amounting to 13.3 million singapore dollars ($9.6 million) for 41 breaches of the central bank notice.Money laundering act 2007

BSI bank is the worst case of control lapses and gross misconduct that we have seen in the singapore financial sector, said ravi meno, MAS’s managing director.

Facing prosecution

Several bank staff were found to have committed wilful act[s] of misconduct, including deceiving auditors, faking asset valuation and taking instructions from a third party in relation to customers’ accounts.

MAS said six members of the bank’s senior management have been referred to the public prosecutor for further actions which may include criminal proceedings. One of the six, yeo jiawei, a former wealth planner at the bank is currently under remand for various offenses.

Swiss financial market supervisory authority, or FINMA, also found BSI bank committed serious breaches of money-laundering laws.

In one case of 1MDB, [BSI bank] executed numerous large transactions with unclear purpose over a period of several years and, despite clearly suspicious indications, did not clarify background to these transactions, FINMA said in a statement.Money laundering act 2007

In a response, 1MDB said in a statement that it had not been contacted by any foreign authority but would remain committed to cooperating .

The latest announcements may lead to more revelations by authorities in the U.S. And several countries investigating 1MDB. In malaysia, pressure would pile on the central bank, which had closed investigations last month following an undisclosed sum of penalty meted on the fund for inadequate disclosures pertaining to a $1.83 billion investment abroad.

Established in lugano in 1873, BSI is one of the oldest swiss banks specializing in private wealth management. Following an acquisition by brazil’s BTG patual in 2015, ownership at the bank changed hands again recently to EFG international.

Zurich-based EFG is a listed global private banking group. Post-acquisition, the group had combined assets under management of 170 billion swiss francs ($171 billion) and 860 client relationship officers, making it one of the largest swiss private banks.Money laundering act 2007

1MDB has emerged as the largest customer to BSI bank and the bank’s management made little effort to query its complex transactions, including above average fees charged for institutional services rendered to the fund.

Established in 2009, the fund is the brainchild of prime minister najib, who until recently was chairman of its advisory board.

Mayuko tani in singapore contributed to this article.