Switzerland Opens Criminal Case Against BSI Bank Whilst Singapore Withdraws Merchant Approval

BSI Bank

BSI Bank is alleged to have been serious break of anti-money laundering requirements.

Switzerland opens criminal proceedings against BSI over 1MDB dealings/ Singapore’s MAS shuts 1MDB-linked BSI Bank over gross misconduct/ Singapore orders BSI bank unit shut as 1 MDB probe widens

Singapore shut down BSI Bank’s operations in the city-state while prosecutors in Switzerland weigh criminal charges against the private bank.

The Monetary Authority of Singapore (MAS) said that Switzerland-based BSI Bank had its merchant status withdrawn in Singapore because of “serious breaches of anti-money laundering requirements, poor management oversight of the bank’s operations, and gross misconduct by some of the bank’s staff.”

“BSI Bank is the worst case of control lapses and gross misconduct that we have seen in the Singapore financial sector. It is a stark reminder to all financial institutions to take their anti-money laundering responsibilities seriously,” Ravi Menon, managing director of MAS, said in the statement.

The last time MAS has withdrawn a merchant bank’s approval was in 1984, which was 32 years ago.

In its statement, MAS said that the private bank had an “unacceptable risk culture, with blatant disregard for compliance and control requirements as well as MAS regulations.”

In addition, MAS charged several of Swiss bank’s staff of making material misrepresentations to auditors and assisting in improper valuations of assets.The central bank, meanwhile, referred six members of BSI’s senior management to the public prosecutor in order to evaluate whether they had committed criminal offences.

“MAS found considerable evidence of gross dereliction of duty and failure to discharge oversight responsibilities on the part of BSI Bank’s senior management. Their ineffective governance led to a poor risk culture, which prioritized questionable customer demands ahead of compliance with anti-money laundering regulations and the bank’s own internal controls,” MAS said.

At the same time, Switzerland’s Office of the Attorney General (OAG) said it opened criminal proceedings against BSI SA Bank on the basis of information gathered through Swiss criminal investigation into 1 Malaysia Development Berhad (1MDB). The OAG further said that the bank’s governance deficiencies rendered BSI unable to prevent the offenses under investigation that was related to the controversial Malaysian development fund.

While MAS did not explicitly name 1MDB in the case, BSI Bank in Switzerland issued a statement saying it had cooperated with both Swiss and Singapore officials in their investigations.

The former employees of Singapore-based BSI Bank were also found to be involved in handling alleged transactions for 1MDB. Six were named, including former senior private bankers, Yak Yew Chee, who already faces a criminal probe in Singapore, and Seah Yew Foong Yvonne; former BSI Bank wealth planner Yeo Jiawei, former head of wealth management services; Kevin Michael Swampillai; Singapore unit’s former chief executive officer Hans Peter Brunner and former deputy chief executive officer, Raj Sriram.

Meanwhile, BSI disclosed that its Group CEO Stefano Coduri stepped down with immediate effect. Coduri was the bank’s CEO since 2012.

Receive News & Ratings Via Email - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for with MarketBeat.com's FREE daily email newsletter.

Leave A Response