MAS shuts Falcon bank, fines DBS and UBS
THE deepening scandal over Malaysian state fund 1MDB claimed more victims yesterday when authorities here closed another Swiss bank and fined DBS and UBS for anti-money laundering breaches.
The million-dollar penalties for DBS and UBS were for breaches in money laundering rules and centred on lapses by specific bank officers, including executives.
The biggest sanction came with the Monetary Authority of Singapore (MAS) ruling that Falcon Private Bank's Singapore branch must cease operations because of "serious failures" in anti-money laundering controls and "improper conduct" by senior management in Switzerland and Singapore.
The breaches were in relation to 1MDB-related fund flows from March 2013 to May 2015.
Falcon, which employs 35 people here at its Centennial Tower office, was also hit with $4.3 million in penalties for failing to adequately assess irregularities in customer accounts' activities and file suspicious transaction reports.
The Swiss-based bank demonstrated "a persistent and severe lack of understanding" of these controls, MAS said yesterday.
Falcon's Singapore branch manager, Jens Sturzenegger, was arrested on Oct 5 over alleged improper conduct by him and other senior managers.
Authorities in Switzerland also took action yesterday, ordering Falcon to turn over illegal profits amounting to 2.5 million Swiss francs (S$3.5 million) for failing to carry out adequate checks into transactions and relationships linked to 1MDB.
Falcon is owned by Abu Dhabi's sovereign wealth fund International Petroleum Investment Company (IPIC).
MAS said it is working with Swiss authorities to oversee an orderly closure.
MAS also fined DBS $1 million and Swiss-based UBS $1.3 million for breaches in relation to 1MDB-related fund flows.
These included weaknesses in corroborating the source of funds, inadequate scrutiny of customer transactions and failure to file timely suspicious transaction reports.
Meanwhile, the MAS is finalising its assessment of Stanchart's Singapore branch and has referred the 1MDB-related transactions processed by remittance agent Raffles Money Change to the Commercial Affairs Department.