The private bank was accused of failing to question a number of large, high-risk transactions it conducted on behalf of a wealthy Malaysian businessman between 2009 and 2015, and accused by the Swiss Financial Market Supervisory Authority FINMA of ignoring internal tip-offs about the suspicious activity.
FINMA found “serious deficiencies” in Coutts’ anti-money laundering processes for the business and launched proceedings against the bank early last year with the CHF 6.5m clawed back from “unlawfully generated profits”.
In a statement on Thursday, FINMA said: “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.
“Given the inadequacy of the bank’s anti-money laundering controls in this particular case, Coutts was in serious breach of its duty to ensure proper business conduct.”
A total of $2.4bn worth of 1MBD-related assets were transferred to Coutts’ accounts in Switzerland during the four-year period, but nothing was reported to authorities about the Malaysian businessman himself until 2015 despite him conducting a series of transactions with a total value of $1.7bn.
Numerous dodgy transactions followed the first initial transfer of $700m into Coutts’ Zurich branch in 2009 with little or no questions asked, FINMA said, and even the legal services team spoke of the risk as the reason for the transfer was a “complete fabrication”.
