The Monetary Authority of Singapore (MAS) is taking away the licence of Falcon Private Bank and imposing fines on DBS and UBS in relation to the 1MDB scandal.
The regulator is withdrawing the merchant bank status of Falcon Private Bank Ltd, Singapore Branch, for serious failures in anti-money laundering (AML) controls and improper conduct by senior management at the head office in Switzerland as well as the Singapore Branch.
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MAS is also imposing financial penalties on DBS Bank and UBS for breaches of MAS’ AML requirements, imposing fines of S$1m on DBS for 10 breaches and S$1.3m on UBS for 13 breaches of MAS Notice 626 – Prevention of Money Laundering and Countering the Financing of Terrorism.
Switzerland headquartered Falcon Bank has been operating as a merchant bank in Singapore since August 2008, offering boutique private banking services. MAS conducted inspections on Falcon Bank in 2013 and 2015. The 2013 inspection found weaknesses in the bank’s controls for client acceptance and transaction surveillance that led to breaches of MAS’ AML requirements. Falcon Bank paid a composition fine of S$300,000 for these breaches, and MAS instructed the merchant bank to strengthen its AML controls. The 2015 inspection uncovered an even larger number of regulatory breaches as well as serious failings on the part of head office senior management and the Singapore branch manager.
The actions on the three banks follow supervisory examinations by MAS into 1MDB-related fund flows that took place through these banks from March 2013 to May 2015. MAS’ investigations benefited from close cooperation with various overseas regulatory counterparts, in particular the Swiss Financial Market Supervisory Authority (FINMA).
The closure of Falcon Bank’s Singapore operations follows MAS’ closure of Swiss bank BSI in May for links to the 1MDB scandal.
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By GlobalDataRavi Menon, managing director at MAS, said:
“Keeping Singapore a clean and trusted financial centre is a shared responsibility. The board and senior management of each financial institution play a pivotal role. They must put in place robust mechanisms to detect suspicious activities, promote strong risk awareness among their staff, and empower their compliance and risk management people. Most of all, they must set the tone from the top – that profits do not come before right conduct.”
