Swiss financial watchdog FINMA has sanctioned private bank Coutts for breaching money-laundering regulations in its business relationships with Malaysia’s scandal-tainted sovereign wealth fund 1MDB.
“Coutts has seriously breached money-laundering regulations by failing to carry out adequate background checks into business relationships and transactions associated with Malaysian sovereign wealth fund 1MDB,” FINMA said in a statement on Thursday.
FINMA said it ordered the bank to disgorge unlawfully generated profits of CHF6.5 million ($6.56 million) and will also consider opening enforcement proceedings against the bank employees responsible.
In December, Singapore’s central bank imposed a penalty of 2.4 million Singapore dollars (CHF1.7 million) on Coutts, which was sold by Royal Bank of Scotland to Union Bancaire Privée in March 2015, for money-laundering breaches related to 1MDB.
The Office of the Attorney General of Switzerland said in January 2016external link that it suspected misappropriations from 1MDB of around $4 billion and alleged in October 2016external link that a Ponzi scheme may have been set up to conceal an alleged $800 million fraud.
Founded by Malaysian Prime Minister Najib Razak, who chaired its advisory board, 1MDB is the subject of money-laundering investigations in at least six countries including Switzerland, Singapore and the United States.
Najib has denied any wrongdoing and said Malaysia will cooperate with the international investigations.
swissinfo.ch and agencies