SINGAPORE: The Monetary Authority of Singapore (MAS) has imposed financial penalties on Credit Suisse and United Overseas Bank (UOB), and issued Prohibition Orders (POs) against three individuals and served notice of its intention to impose the same regulatory action on three others.
Its latest regulatory action comes as MAS announced in a media release on Tuesday (May 30) the completion of its two-year review of the banks involved in 1MDB-related transactions known to-date.
REGULATORY ACTIONS AGAINST CREDIT SUISSE AND UOB
The latest inspections of Credit Suisse and UOB revealed several breaches of anti-money laundering (AML) requirements and control lapses, MAS said.
They included weaknesses in conducting due diligence on customers and inadequate scrutiny of customers’ transactions and activities. MAS said it did not detect pervasive control weaknesses within these banks.
MAS imposed on Credit Suisse and UOB financial penalties amounting to S$700,000 and S$900,000, respectively, for breaches of MAS Notice 626 - Prevention of Money Laundering and Countering the Financing of Terrorism.
It has directed the banks to appoint independent parties to assess and confirm to MAS that rectification measures have been effectively implemented. MAS 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 strengthen their AML controls, the media release added.
BANKS PLEDGE TO IMPROVE POLICIES, DONATE PROFITS TO CHARITY
Both banks released press statements in response to the announcement on Tuesday morning, noting that MAS findings had found no pervasive anti-money laundering control weaknesses and accepting the central bank's findings.
Credit Suisse said it "takes a very serious view of our obligations in the prevention of money laundering and is firmly committed to upholding the high standards of the Singapore financial centre".
"We acknowledge the outcome of the review and regret that we have fallen short of the MAS’ and our own high standards. In recognition of the foregoing, Credit Suisse will donate all profits from the transactions in question to a worthy cause in support of our local community.
"Over the last few years, Credit Suisse has been investing in people and systems to strengthen its anti-money laundering processes and controls. The bank has co-operated fully with the MAS and taken further measures to address the issues identified in its review.”
In a separate statement, UOB said it "takes the importance of rigour in customer due diligence seriously".
The bank said it had instituted measures to address the areas of concern, including enhancing its training programme to raise risk and control awareness among its staff. Like Credit Suisse, UOB also said the profits associated with the lapses will be donated to charity.
"UOB will continue to build upon our anti-money laundering policies, processes and practices to strengthen the Bank’s ability to combat the threats posed by those seeking to abuse the banking system.
"We also expect our staff to uphold the highest ethical and professional standards in line with our code of conduct and will not condone behaviour that falls short of this."
PROHIBITION ORDERS AGAINST CONVICTED BANK EMPLOYEES
Further to its announcement on Mar 13, 2017, MAS also announced on Tuesday that it has issued lifetime POs against Mr Jens Fred Sturzenegger and Mr Yak Yew Chee, as well as a 15-year PO against Ms Seah Mei Ying with effect from May 29, 2017.
Mr Sturzenegger was the branch manager of Falcon Private Bank Ltd, Singapore branch (Falcon Bank), while Mr Yak and Ms Seah were employees of BSI Bank Limited (BSI Bank).
Mr Sturzenegger has been convicted of financial crimes including providing false information to authorities in an attempt to cover up his knowledge of Falcon Bank’s relationship with Mr Low Taek Jho.
Mr Yak and Ms Seah were convicted of multiple counts of failing to report suspicious transactions and of forging reference letters at BSI Bank on behalf of Mr Low.
All three individuals are prohibited from (i) providing any capital markets and financial advisory services; and (ii) taking part in the management of, acting as a director of, or becoming a substantial shareholder of any capital markets services or financial advisory firm in Singapore.
PROHIBITION ORDERS AGAINST KELVIN ANG AND OFFICERS OF NRA CAPITAL PTE LTD
MAS has served notice of its intention to issue a PO against Mr Ang Wee Keng Kelvin, a former representative of Maybank Kim Eng Securities (MKES). MAS also served notice of its intention to issue POs against the Chief Executive Officer of NRA Capital (NRA), Mr Kevin Scully, and its former Head of Research, Mr Lee Chee Waiy.
Through Mr Ang’s introduction, NRA was appointed to perform the valuation of PetroSaudi Oil Services Limited (PSOSL). On 24 May 2017, Mr 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 PSOSL.
MAS said Mr Lee had been the primary person in NRA working on the valuation. Apart from accepting the bribe, he was also found to have applied inappropriate methodology and assumptions in the valuation of PSOSL. 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 PSOSL, MAS added.
Commenting on the review, Ravi Menon, Managing Director of MAS said: “The two-year long 1MDB-related review holds key lessons for both MAS and financial institutions in Singapore. 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. 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 added.