Swiss financial market supervisor Finma has fined private bank Coutts & Co CHF6.5m for flouting money laundering regulations linked to scandal-ridden Malaysian sovereign wealth fund 1Malaysia Development Berhad (1MDB).

Finma said that the bank failed to adequately assess business relationships and transactions related to 1MDB.

In early 2016, the regulator started its probe of the bank and found that some of the staff of Coutts Singapore branch struck business relationships with individuals tied to 1MDB in 2003. Some of the business relationships were later transferred to Coutts Zurich in 2009 when the bank opened a business relationship with a young Malaysian businessman.

Upon opening the account, the Malaysian businessman informed that $10m in family assets would be transferred to the bank. Instead, about $700m was transferred to the account from 1MDB.

The Swiss regulator further added that between late 2009 and early 2013, $1.7bn worth of several “high-risk transactions” were processed through the businessman’s account.

The bank was also alleged of opening a further business relationship with the businessman in 2012 even after having serious grounds for suspicion. This time too, $680m was moved to the account from an offshore firm, as opposed to the information provided at the time of opening the account.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

Overall, Coutts was alleged of allowing $2.4bn worth of 1MDB-related assets to be transferred to accounts in Switzerland. Finma also accused the bank of ignoring warnings from some of its employees.

“The bank failed to adequately clarify the circumstances surrounding a number of business relationships and unusually large, high-risk transactions. In addition, it did not follow up on relevant internal information and, despite the existence of substantive evidence, failed to report any suspicions to the Swiss authorities until the spring of 2015,” the Swiss regulator said.

The regulator said that it is considering enforcement proceedings against the employees responsible for the breaches.