Thursday, October 29, 2020

Falcon Private bank could lose Swiss licence for role in 1MDB money-laundering scandal

-

Falcon Private Bank, a wealth manager that was at the centre of Malaysia’s 1MDB scandal, could lose its Swiss banking licence by the end of the week, two sources close to the situation told Reuters.

Swiss financial markets watchdog FINMA could withdraw the licence for the private bank owned by Abu Dhabi state fund Mubadala Investment Company on the grounds that it has continuously failed to meet regulatory requirements, the sources said.

“Falcon employees are preparing to wind down the institute,” one of the people said. A social plan for employees losing their jobs was also in the works.

Falcon, FINMA and Mubadala all declined to comment.

- Advertisement -

Falcon gained global notoriety in 2015 after it was reported that investigators found nearly $700 million had been transferred from an account at the bank’s Singapore outpost to accounts in Malaysia linked to then Prime Minister Najib Razak.

Najib, now on trial for corruption in Malaysia, denies all charges against him. FINMA found in 2016 that Falcon had violated money-laundering regulations by failing to carry out adequate background checks into transactions and business relationships associated with state fund 1MDB which were booked in Switzerland, Singapore and Hong Kong.

The watchdog told Falcon it would lose its licence if there was any repetition of the offence. Swiss federal prosecutors also opened a criminal investigation, which is ongoing.

Mubadala has since looked but failed to find any buyers for the business. A takeover of the entire bank has become unrealistic, but Falcon is continuing to try to sell parts of its customer base, three people said.

- Advertisement -

The bank, with headquarters in Zurich and other locations in Dubai and Luxembourg, is in talks with at least one interested party for such an asset deal whose outcome is uncertain.

Credit Suisse manager Walter Berchtold, who took over as Falcon boss in 2016, tried to build up business trading the cryptocurrency Bitcoin <BTC => but quarrelled with its then-owner International Petroleum Investment Company (IPIC), which has since merged into Mubadala.

He was succeeded in 2017 by Martin Keller, also a former Credit Suisse manager. With the help of the strategy consultant Boston Consulting Group, Keller tried again to rivitalise the bank’s business, but also fought strong headwinds.

As key employees and customers left the bank, Falcon bled billions of assets under management, which now likely stand in the low- to mid-single digit billions of Swiss francs. The outflows also caused a drop in earnings.

In 2019 it became apparent that implementing the new strategy was no longer realistic, two of the insiders said. “FINMA has given the bank three years to realign the business,” one of the sources said. “Apparently, it wasn’t happy with what was achieved.” FINMA in October gave Falcon until the end of April, a deadline about to expire, one source said.

A separate probe by Singapore authorities over Falcon’s involvement in the 1MDB scandal resulted in the wealth manager’s being stripped of its local banking licence.

Original article on reuters.com

MUST READ

Nigerian court declines to issue international arrest warrant for fugitive ex-Petroleum Minister in corruption case

The Abuja Division of the Federal High Court, on Wednesday, refused an application by the Economic and Financial Crimes Commission, EFCC, for an arrest...

South Korea’s former Vice Justice Minister sentenced to jail for bribery and sexual favors

Former Vice Justice Minister Kim Hak-eui, the figure at the center of one of Korea’s biggest political sex scandals, was placed under pretrial detention...

Beam Suntory Inc. fined $19.6 million in foreign bribery case

Beam Suntory Inc. (Beam), a Chicago-based company that produces and sells distilled beverages, has agreed to pay a criminal monetary penalty of $19,572,885 to...

Julius Baer to deny two former CEOs their bonuses over money laundering scandal

Julius Baer will withhold millions of francs in bonuses from its former chief executives Boris Collardi and Bernhard Hodler, as a result of a...

Goldman Sachs executives to cover part payments of $3 billion fines in 1MDB scandal

Nine current or former Goldman Sachs executives, including CEO David Solomon, will have to pay back hundreds of millions of dollars in compensation over...

Subscribe For More

Get our daily notification on the latest financial crimes news around the World

Advertisement
Advertisement

Latest News

This Week

Beam Suntory Inc. fined $19.6 million in foreign bribery case

Beam Suntory Inc. (Beam), a Chicago-based company that produces and sells distilled beverages, has agreed to pay a criminal monetary penalty of $19,572,885 to...

Two U.S. Navy service members get prison for defrauding military insurance program

Two U.S. Navy service members were sentenced in San Diego federal court Friday for their roles in an insurance fraud scheme that involved making false medical claims to...

Spanish police arrests operator of Crypto Arbitrage firm Arbistar on fraud charges

The CEO of Arbistar the Spanish investment company, Santiago Fuentes, has been arrested and arraigned on charges of fraud, belonging to a criminal organization...

Nigerian court declines to issue international arrest warrant for fugitive ex-Petroleum Minister in corruption case

The Abuja Division of the Federal High Court, on Wednesday, refused an application by the Economic and Financial Crimes Commission, EFCC, for an arrest...
Advertisement

Adblock Detected!

Our website is made possible by displaying online advertisements to our visitors. Please consider supporting us by whitelisting our website.

Enable Notifications    Ok No thanks