The regulator said it is not disclosing further details about proceedings or the identities of the three persons concerned. Enforcement proceedings were begun against the Swiss bank in June 2021.
The Swiss regulator has barred Mirabaud & Cie
from taking on new clients who carry increased money laundering
risks until serious compliance failings have been corrected. The
regulator has also confiscated SFr12.7 million ($15
million) of unlawfully generated profits from the
Geneva-headquartered bank.
The Swiss Financial Market Supervisory Authority, FINMA, said yesterday that it
has opened three proceedings against individuals in the case.
“The bank failed to review and document sufficiently the economic
background of client relationships and transactions,” FINMA said
yesterday in a statement.
In June 2023, FINMA concluded enforcement proceedings against
Mirabaud & Cie SA that were opened in June 2021.
The regulator said it found that the bank had “seriously
violated” provisions of financial market law. FINMA said it
opened a probe after “indications of misconduct concerning a
complex client structure alleged to have been connected with a
businessman accused of tax evasion who has since died.”
The bank had contested FINMA’s disclosure of public information
about the proceedings in court. The appeal has now been dismissed
by the Federal Supreme Court, FINMA said.
FINMA said that Mirabaud maintained multiple business
relationships after 2010 with companies and complex structures
that could have been directly or indirectly connected with the
aforementioned businessman. Mirabaud managed assets of up to $1.7
billion within the scope of these business relationships. These
assets at times accounted for almost 10 per cent of the bank’s
entire assets under management.
“The investigations by FINMA have revealed that the bank
inadequately reviewed and documented the beneficial ownership and
economic background of numerous transactions despite indications
of increased money-laundering risks, in particular, in connection
with qualified tax avoidance and concrete warnings since 2018
concerning the relevant client relationships,” FINMA said.
“Mirabaud altogether did not have adequate organisation and
sufficient risk management for monitoring these business
relationships. The bank therefore seriously violated provisions
of financial market law concerning adequate organisation
[governance], risk management and money laundering prevention
over a prolonged period.”
Mirabaud cooperated with FINMA during the proceedings. It also
took operational, organisational and HR measures to rectify the
shortcomings during the FINMA proceedings. As well as a
broad-based reorganisation, Mirabaud has strengthened the
measures in place for anti-money laundering, risk management, the
entire internal control system and governance. FINMA generally
considers these measures to be suitable for restoring compliance
with the law, the regulator’s statement said.
FINMA has ordered the bank to make further adjustments to the
measures in place for anti-money laundering, expand its internal
control system and renew and strengthen its corporate governance
organisationally, and in terms of HR. In addition, the bank must
review all its client relationships from a risk perspective. The
executive board must then decide on this basis whether to
continue them.
Mirabaud must also thoroughly review and, if necessary,
re-document all relevant transactions with increased risks from
2018 to 2022. Furthermore, it must create new incentives in its
remuneration policy for an appropriate handling of risks.
Pending full implementation of the measures ordered and
restoration of compliance with the law, FINMA has prohibited the
bank from accepting any new clients with increased money
laundering risks. It has also banned all activities that increase
operational risks. FINMA has opened three enforcement proceedings
against individuals connected to the case.
The regulator added that it is not disclosing any further details
concerning these proceedings or the identity of the individuals
concerned. FINMA’s ruling, which has been legally binding since
August 2023, has not been contested.