Since the fallout of 1MDB, Mas completed a series of bank inspections targeted at 1MDB-related fund flows, with the latest inspections of Credit Suisse and UOB revealing several breaches of anti-money laundering (AML) requirements and control lapses.
These include weaknesses in conducting due diligence on customers and inadequate scrutiny of customers’ transactions and activities.
The Singapore watchdog, however, did not detect pervasive control weaknesses within the banks.
Fines
Fines of S$700,000 ($505,000) and S$900,000 were imposed on Credit Suisse and UOB, respectively.
Mas has also instructed the bank to take disciplinary measures, where appropriate, against errant staff.
Ravi Menon, managing director of Mas, said: “The two-year long 1MDB-related review holds key lessons for both Mas and financial institutions in Singapore. Mas has enhanced its AML surveillance and taken unprecedented enforcement actions against errant institutions and individuals.
“Financial institutions have increased their risk awareness and strengthened their AML controls. Our financial industry is in a better position today than it was when the abuses stemming from the 1MDB-related flows took place. The price for keeping our financial centre clean as it grows in size and inter-connectedness is unstinting vigilance.”
Swiss regulato
Switzerland’s regulator, Finma, has also reprimanded the country’s second-largest bank this week after conducting an extensive investigation into Credit Suisse’s dealing around 1MDB.
“During the investigations, it was not established that the bank had committed any systematic breaches of supervisory law,” a Finma spokesman said in an emailed statement to newswire Reuters.
“Finma did, however, send the bank a written reprimand for shortcomings in its money-laundering processes,” it said.
Prohibition Orders
Lifetime prohibition orders have been issued against Jens Fred Sturzenegger and Yak Yew Chee, as well as a 15-year ban against Seah Mei Ying Yvonne with effect from 29 May 2017.
Sturzenegger was the branch manager of Falcon Private Bank, Singapore branch (Falcon Bank). He has been convicted of financial crimes including providing false information to authorities in an attempt to cover up his knowledge of Falcon Bank’s relationship with Low Taek Jho, a Malaysian businessman and ‘person of interest’ in the investigation into 1MDB.
Yak and Seah, who were employees of BSI Bank, were convicted of multiple counts of failing to report suspicious transactions and of forging reference letters at BSI Bank on behalf of Low.
All three individuals are prohibited from providing any capital markets and financial advisory services; and taking part in the management of, acting as a director of, or becoming a substantial shareholder of any capital markets services or financial advisory firm in Singapore, Mas said.
More to come
Further prohibition orders are to be issued against Ang Wee Keng Kelvin, a former representative of Maybank Kim Eng Securities (MKES), Kevin Scully, the chief executive of NRA Capital (NRA), and Lee Chee Waiy, the firm’s former head of research.
Through Ang’s introduction, NRA was appointed to perform the valuation of PetroSaudi Oil Services Ltd (PSOSL). On 24 May 2017, Ang was convicted of an offence under the Prevention of Corruption Act for bribing Lee with S$3,000 to expedite the preparation of the valuation report on PSOSL.
Lee had been the primary person in NRA working on the valuation. Apart from accepting the bribe, he was also found to have applied inappropriate methodology and assumptions in the valuation of PSOSL.
As chief executive of NRA, Scully failed to ensure that his analyst, Lee, had exercised sufficient care, judgment and objectivity in the valuation of PSOSL.
The proposed ban will prohibit Ang from providing any capital markets and financial advisory services; and taking part in the management of, acting as a director of, or becoming a substantial shareholder of any capital market services and financial advisory firm in Singapore for six years.
Lee and Scully will be banned from the same for a period of six and three years, respectively.
Action
Arising from its extensive review, Mas has also shut down two merchant banks, BSI Bank and Falcon Bank.
Financial penalties of S$29.1m in aggregate have been imposed on eight banks (BSI Bank, Falcon Bank, DBS, UBS AG, Standard Chartered Bank, Coutts, Credit Suisse and UOB) for various breaches of AML requirements.
Prohibition orders, ranging from 10 years to a lifetime, have been issued against four former employees of financial institutions implicated in these transactions, with three more expected.
