Halister News

(Bloomberg) -- Falcon Private Bank Ltd. would have licence withdrawn in the event of further breach, FINMA says in statement, saying bank breached money laundering regulations in transactions associated with Malaysia’s 1MDB.

• FINMA has launched enforcement proceedings against two of the bank’s former executives
• In the period under investigation between 2012 and the summer of 2015, assets amounting to approximately $3.8 billion were transferred to accounts at Falcon and associated with the 1MDB Group. These funds were generally moved on quickly: FINMA
• Falcon had a number of business relationships with domiciliary companies within the 1MDB Group and executed transactions amounting to approximately $2.5 billion via the accounts of two of these offshore companies: FINMA
• Falcon did not sufficiently query or assess the plausibility of the proffered documents and information about the supposed financing of energy projects, nor did it question the commercial background of the $1.3 billion which was immediately transferred from one account to another
• Falcon had a client relationship with a young Malaysian businessman with links to individuals in Malaysian government circles: FINMA
• Falcon did not verify how this individual had been able to acquire assets of $135 million in an extremely short period of time or why a total of $1.2 billion was transferred to his accounts at a later date: FINMA
• Falcon failed to adequately investigate the commercial background to pass-through transactions amounting to $681 million and the repayment six months later of $620 million via these accounts despite conflicting evidence: FINMA
• FINMA: an internal Falcon e-mail states: “We started this six months ago and now we have to go through with it – somehow”
• FINMA: Internal warnings from bank employees querying transactions, relationship with the Malaysian businessman were not followed up satisfactorily
• Falcon’s decision-makers were aware of these internal concerns, yet decided to carry out transactions: FINMA
• One senior manager warned the Singapore branch carrying out the transactions: “Head Office is watching you”: FINMA
• Two representatives of the bank’s owners who were on the board of directors initiated business relationships with the 1MDB Group and with individuals from their immediate circle: FINMA
• Both board members pursued their own illegitimate purposes; neither of them remains on the bank’s board of directors
• FINMA has no evidence that other members of Falcon’s board were implicated in these matters or that this behavior was widespread at the bank
• FINMA CEO Mark Branson: “The issues surrounding 1MDB form one of the largest cases of suspected corruption in recent times. The global financial system has been blatantly misused’’
• NOTE: Falcon Confident About Future After MAS, FINMA Probes on 1MDB NSN OEV0YB6TTDS4

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