In Historic First, Singapore Shuts Local Private Bank Due To "Worst Gross Misconduct" Is Has Ever Seen
By Tyler Durden
Following the demise of the thousand year-long tradition of Swiss banking secrecy, crushed virtually overnight by Barack Obama’s demands to make the central European nation’s banking industry transparent, one of the major consequences was the shift in money laundering from Geneva and Zurich to the latest and greatest “anonymous” banking and tax evasion hub located halfway around the world, namely Singapore. And overnight, we got the first shot across the bow of the city state’s “Swiss banking model”, when Singapore ordered the closure of Swiss private bank BSI SA’s unit as criminal proceedings were started against the firm as part of global investigations into a the troubled Malaysian 1MDB state fund.
As Bloomberg reports, in an unprecedented until now move, the Monetary Authority of Singapore said it will withdraw BSI Bank’s status as a merchant bank for breaches of money laundering rules as the Swiss Attorney General said it was taking legal action based on information from criminal probes into 1Malaysia Development Bhd, or 1MDB. EFG International AG said it received approval on Tuesday from the Swiss authorities to take over BSI and still expects the transaction to be completed, although at a reduced price.
Over one year after the collapse of 1MDB, aided and abetted by none other than Goldman Sachs, officials have finally started to piece together the fund flows, and BSI was the first casualty: “BSI Bank is the worst case of control lapses and gross misconduct that we have seen in the Singapore financial sector,” Ravi Menon, managing director of MAS, said in the statement. “It is a stark reminder to all financial institutions to take their anti-money laundering responsibilities seriously.”
But why when the US NAR has an explicit exemption from AML responsibilities courtesy of the US government just to make money laundering in US real estate that much easier. Oh wait, now we get it…
The crackdown is part of the global money laundering and embezzlement investigations surrounding 1MDB. As reported before, a Malaysian parliamentary committee identified at least $4.2 billion of irregular transactions by the state fund, and recommended the advisory board headed by Prime Minister Najib Razak be disbanded. BSI’s Group CEO Stefano Coduri resigned as the Swiss regulator said it will seize 95 million Swiss francs ($96 million) from the firm and start enforcement procedures against two former bank employees.
1MDB didn’t immediately reply to a request for comment on its links to BSI. Both 1MDB and Najib have consistently denied wrongdoing. BSI said Tuesday that it has cooperated fully with the investigations into 1MDB by the Singapore and Swiss authorities. BSI remains well capitalized, it said.
As Bloomberg adds, Singapore’s central bank said it will allow the transfer of the BSI Singapore unit’s assets and liabilities to the Singapore branch of EFG or to the parent entity BSI SA. The MAS will also impose S$13.3 million ($9.6 million) in financial penalties on the BSI unit for 41 breaches, including its failure to conduct due diligence on high-risk accounts and monitor suspicious customer transactions.
What …read more
