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Credit Suisse, UOB fined for transactions related to 1MDB

SINGAPORE — The Monetary Authority of Singapore (MAS) on Tuesday (May 30) said it fined Credit Suisse and United Overseas Bank (UOB) S$700,000 and S$900,000, respectively, for breaches of anti-money laundering (AML) requirements.

Malay Mail Online file photo.

Malay Mail Online file photo.

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SINGAPORE — The Monetary Authority of Singapore (MAS) on Tuesday (May 30) said it fined Credit Suisse and United Overseas Bank (UOB) S$700,000 and S$900,000, respectively, for breaches of anti-money laundering (AML) requirements. 

This comes as it wrapped up a two-year review of banks involved in transactions linked to 1Malaysia Development Berhad (1MDB).

In its release, the MAS also served notice of its intention to issue Prohibition Orders (POs) on three more individuals: Ang Keng Wee Kelvin, a former representative of Maybank Kim Eng Securities, NRA Capital CEO Kevin Scully and former NRA Head of Research Lee Chee Waiy.

Through Ang’s introduction, NRA was appointed to perform the valuation of PetroSaudi Oil Services. Last week, Ang was convicted of an offence under the Prevention of Corruption Act for bribing Mr Lee with S$3,000 to expedite the preparation of the valuation report on the company.

Mr Lee had been the “primary person” in NRA working on the valuation, the MAS said. Apart from accepting the bribe, he was also found to have applied “inappropriate methodology and assumptions” in the valuation. 

“As CEO of NRA, Mr Scully had failed to ensure that his analyst, Mr Lee, had exercised sufficient care, judgment and objectivity in the valuation of (PetroSaudi),” the MAS said. It is seeking six-year POs against Ang and Mr Lee, and a three-year PO against Mr Scully. 

Under the POs, individuals will be banned from performing any regulated activity under the Securities and Futures Act, and taking part, directly or indirectly, in the management of any capital market services firm in Singapore. Flouting these rules could result in a maximum fine of S$150,000, a jail term of two years, or both. 

To date, POs have been imposed on four individuals in total, with the duration of the POs ranging from 10 years to lifetime. They are former Goldman Sachs (Singapore) director Tim Leissner, former Falcon Private Bank Singapore branch manager Jens Fred Sturzenegger, as well as former BSI employees Yak Yew Chee and Seah Mei Ying. 

The review is based on 1MDB-related fund flows known to MAS so far. The latest inspections of Credit Suisse and UOB revealed several breaches of anti-money laundering (AML) requirements and control lapses, including weaknesses in conducting due diligence on customers and inadequate scrutiny of customers’ transactions and activities. 

The MAS did not, however, detect pervasive control weaknesses within these banks. 

It has directed the banks to appoint independent parties to assess and confirm that rectification measures have been effectively implemented. It has also instructed the management of Credit Suisse and UOB to take disciplinary measures, where appropriate, against errant staff.  

The banks are currently taking measures to address the weaknesses identified and to strengthen their AML controls. UOB said in a statement on Tuesday that it accepted the MAS’ findings. 

It added that it has put in place measures to address the areas of concern, including enhancing its training programme to raise risk and control awareness among staff. 

UOB said it will donate the profits associated with the AML lapses to charity.

A Credit Suisse spokesperson said it takes “a very serious view” of its AML obligations and reiterated its commitment to “upholding the high standards of the Singapore financial centre”. 

The spokesperson added: “We acknowledge the outcome of the review and regret that we have fallen short of the MAS’ and our own high standards ... Credit Suisse will donate all profits from the transactions in question to a worthy cause in support of our local community.”

OUTCOME OF MAS REVIEW

Shut down 
Arising from its extensive review started in March 2015, the Monetary Authority of Singapore (MAS) has shut down BSI Bank and Falcon Bank here due to egregious failures of anti-money laundering (AML) controls and improper conduct by senior management at the two 
Swiss-based private banks.

Fines
Financial penalties totalling S$29.1 million have also been imposed on eight banks — BSI (S$13.3 million), Standard Chartered (S$5.2 million), Falcon (S$4.3 million), Coutts (S$2.4 million), UBS (S$1.3 million), DBS (S$1 million), UOB (S$0.9 million) and Credit Suisse (S$0.7 million).

Prohibition Orders
To date, Prohibition Orders (POs) have been imposed on four individuals. In March, the MAS announced it had imposed a 10-year PO on ex-Goldman Sachs (Singapore) director Tim Leissner, who is among the most high-profile individuals to be banned from the Singapore markets. 

At that time, it also made known its intention to serve lifetime POs — understood to be the first lifelong bans sought under the Securities and Futures Act and the Financial Advisers Act — against former Falcon Private Bank Singapore branch manager Jens Fred Sturzenegger, and former BSI employee Yak Yew Chee. Another ex-BSI staff Seah Mei Ying, formerly known as Yvonne Seah Yew Foong, 
was also served notice of a 15-year PO. 

The MAS said yesterday that the POs for Sturzenegger, Yak and Seah — who have all been convicted of financial crimes — have been issued and took effect from Monday. 

Key Lessons
MAS managing director Ravi Menon said the review, which has been completed, “holds key lessons for both MAS and financial institutions in Singapore”. 

The MAS has enhanced its AML surveillance and taken “unprecedented enforcement actions” against errant institutions and individuals. 

Financial institutions have increased their risk awareness and strengthened their AML controls, he added.

“Our financial industry is in a better position today than it was when the abuses stemming from the 1MDB-related flows took place. The price for keeping our financial centre clean as it grows in size and inter-connectedness is unstinting vigilance,” he said.

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