The Monetary Authority of Singapore (MAS) is withdrawing the licence of Falcon Private Bank, a Swiss wealth manager operating in the city state. Singapore’s central bank also fined local banking group DBS and the Singapore branch of Switzerland’s UBS for alleged lapses relating to scandal-hit Malaysian sovereign fund 1Malaysia Development Bhd (1MDB).
All three were judged to have contravened Singapore’s anti-money laundering (AML) requirements in their dealings with 1MDB. The MAS said that it hadn’t discovered pervasive AML control weaknesses in DBS and UBS, as it had at Falcon, but identified specific lapses by officers of the banks that had led to 10 and 13 breaches of regulations by DBS and UBS, respectively.
The latest move follows MAS’s earlier actions in May, when it ordered the shutdown of another Swiss private bank, BSI; subsequently charging individuals and freezing assets linked to the fund. In July, Ravi Menon, the managing director of MAS, said that the 1MDB case had “dented” Singapore’s reputation as a clean and trusted financial centre.
“Falcon Bank has demonstrated a persistent and severe lack of understanding of MAS’ AML requirements and expectations,” stated MAS. “Taking into account the totality of Falcon Bank’s conduct, MAS’ assessment is that the merchant bank will be unable to comply with these requirements and expectations going forward.”
In addition to losing its licence, Falcon was fined 4.3m Singapore dollars (SGD), equivalent to US$3.1m, while penalties of SGD1m and SGD1.3m respectively were imposed on DBS and UBS. MAS is also investigating possible AML breaches at Standard Chartered. Separately, the Swiss Financial Market Supervisory Authority (FINMA) requires Falcon to repay 2.5m Swiss francs (CHF) (US$2.54m) in illegal profits and is barring it from dealing with foreign politically-exposed persons for three years.
1MDB, which was founded in 2009 by Malaysian prime minister Najib Raazak is being investigated for suspected money laundering offences in at least six countries, including the US. It is alleged that billions of dollars allegedly were funnelled from the fund to the private bank accounts of individuals connected with Najib, who has denied any wrongdoing and said Malaysia would cooperate with the international investigations.
A press release issued by Falcon insisted that the private bank was “confident about its future” following the 1MDB investigations by FINMA and MAS. “With its committed staff, strong capital base and high liquidity ratio, Falcon Private Bank will now concentrate on further growing its franchise,” it declared.
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