Swiss Regulator Penalizes Mirabaud Bank $15M for AML Compliance Failures

FINMA, the Swiss financial market regulator, seized “12.7 million Swiss francs ($15 million)” from the private bank “Mirabaud & Cie” due to breachings of AML and financial market law on 17 September 2024.

Swiss Regulator Reveals Major AML Breaches

Mirabaud Bank, based in Geneva, has failed to investigate its customer relationship and transaction connected to an expired business man who was guilty of “tax evasion”, as stated by FINMA. Further, it didn’t give details of the individual who claimed the accusations.

FINMA reported about taking legal action against three individuals without giving any detail about them. The regulatory authority has declined further requests for more explanations about the case.

It stated that the private bank has business dealings with financial organizations and firms that may be directly or indirectly associated with businessmen.

According to FINMA, the bank maintained the funds “upto $1.7 billion in assets within the scope” for these partnerships, which were under investigation by the regulatory body.

The above-mentioned amount was almost 10 percent of its total assets under management then.

How does this large portion of assets under management escape AML scrutiny?

The bank has failed to conduct customer due diligence (CDD) on high-risk individuals, violating Switzerland’s AML regulation. Under Swiss banking law, banks are required to comply with  AML regulations.

Financial Penalties And Reforms

FINMA mandated Mirabaud to review and re-document all the linked financial transactions considered under the high-risk category from “2018 to 2022” and encourage employee bonuses in its remuneration policy to monitor transactions according to AML requirements.

The regulator stated, “Finally, FINMA confiscates CHF 12.7 million (Swiss francs) of unlawfully generated profits.”

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Swiss Court Orders Mirabaud Case Made Public

The investigation of the case was stopped in 2023 as declared by the regulator and the bank had tried to keep everything confidential, a bank representative acknowledged. FINMA announced that a high court in Switzerland has now passed the ruling to make this matter public.

The bank has stated that it had taken the responsibility to resolve the concerns related to money laundering and had been supportive of FINMA. Further the bank declared the matter by saying “settles the past” and can now move forward.

This case illustrates that failure to conduct proper checks can result in penalties for breaching AML laws.