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Finma warns it can revoke Falcon Bank licence over 1MDB

Finma warns it can revoke Falcon Bank licence over 1MDB
Falcon Private Bank has been sanctioned by Swiss regulator Finma for 1MDB breaches, which warned that its licence could be withdrawn if further breaches occur.
 
‘Falcon Private Bank Ltd. has seriously breached money laundering regulations by failing to carry out adequate background checks into transactions and business relationships associated with Malaysian sovereign wealth fund 1MDB which were booked in Switzerland, Singapore and Hong Kong,’ the Swiss regulator said in a statement.
 
‘The Swiss Financial Market Supervisory Authority Finma has ordered the disgorgement of illegally generated profits amounting to CHF 2.5 million and banned the bank from entering into business relationships with foreign politically exposed persons for a period of three years.
 
‘Furthermore, the bank would have its licence withdrawn in the event of a further breach.’

More details provided


The regulator has launched enforcement proceedings against two of the bank's former executives, based on evidence that Swiss money laundering regulations had been breached.

The breaches in question relate to business relationships and transactions in the context of the alleged corruption scandal surrounding the Malaysia.
 
In the period between 2012 and summer of 2015, Finma said assets amounting to around $3.8 billion were transferred to accounts at Falcon and associated with the 1MDB group.
 
‘These funds were generally moved on quickly. The business relationships and transactions booked in Switzerland and at Falcon’s Singapore and Hong Kong branches were unusual and involved a high level of risk for the bank both through their nature and the amounts transacted,’ the regulator said.
              
The regulator, nevertheless, acknowledged that Falcon Bank has now overhauled the composition of its board of directors and executive board.
 
In addition, the group's new management team has already implemented a range of corrective measures, it said. 

Warning to other banks


‘The issues surrounding 1MDB form one of the largest cases of suspected corruption in recent times,’ Finma CEO Mark Branson said.

'The global financial system has been blatantly misused. Suspect financial flows in the billions have been shifted through banks of multiple nationalities and financial centers on three continents, and warning signals ignored. Where Swiss banks or their foreign operations have played an unacceptable role, they will be sanctioned. It is equally important for the future health of the financial system that through close international cooperation all relevant parties are brought to justice.’

Finma has conducted investigations at a number of Swiss banks in the context of the 1MDB case and launched proceedings against five other banks in addition to Falcon.
 
Finma concluded its proceedings against BSI bank in relation to 1MDB in May 2016, ordering the bank to be dissolved.

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