The regulator said it is not disclosing further details about proceedings or the identities of the three persons concerned. Enforcement proceedings were begun against the Swiss bank in June 2021.

The Swiss regulator has barred Mirabaud & Cie from taking on new clients who carry increased money laundering risks until serious compliance failings have been corrected. The regulator  has also confiscated SFr12.7 million ($15 million) of unlawfully generated profits from the Geneva-headquartered bank. 

The Swiss Financial Market Supervisory Authority, FINMA, said yesterday that it has opened three proceedings against individuals in the case.

“The bank failed to review and document sufficiently the economic background of client relationships and transactions,” FINMA said yesterday in a statement.

In June 2023, FINMA concluded enforcement proceedings against Mirabaud & Cie SA that were opened in June 2021.

The regulator said it found that the bank had “seriously violated” provisions of financial market law. FINMA said it opened a probe after “indications of misconduct concerning a complex client structure alleged to have been connected with a businessman accused of tax evasion who has since died.”

The bank had contested FINMA’s disclosure of public information about the proceedings in court. The appeal has now been dismissed by the Federal Supreme Court, FINMA said.

FINMA said that Mirabaud maintained multiple business relationships after 2010 with companies and complex structures that could have been directly or indirectly connected with the aforementioned businessman. Mirabaud managed assets of up to $1.7 billion within the scope of these business relationships. These assets at times accounted for almost 10 per cent of the bank’s entire assets under management.

“The investigations by FINMA have revealed that the bank inadequately reviewed and documented the beneficial ownership and economic background of numerous transactions despite indications of increased money-laundering risks, in particular, in connection with qualified tax avoidance and concrete warnings since 2018 concerning the relevant client relationships,” FINMA said. “Mirabaud altogether did not have adequate organisation and sufficient risk management for monitoring these business relationships. The bank therefore seriously violated provisions of financial market law concerning adequate organisation [governance], risk management and money laundering prevention over a prolonged period.”

Mirabaud cooperated with FINMA during the proceedings. It also took operational, organisational and HR measures to rectify the shortcomings during the FINMA proceedings. As well as a broad-based reorganisation, Mirabaud has strengthened the measures in place for anti-money laundering, risk management, the entire internal control system and governance. FINMA generally considers these measures to be suitable for restoring compliance with the law, the regulator’s statement said.

FINMA has ordered the bank to make further adjustments to the measures in place for anti-money laundering, expand its internal control system and renew and strengthen its corporate governance organisationally, and in terms of HR. In addition, the bank must review all its client relationships from a risk perspective. The executive board must then decide on this basis whether to continue them. 

Mirabaud must also thoroughly review and, if necessary, re-document all relevant transactions with increased risks from 2018 to 2022. Furthermore, it must create new incentives in its remuneration policy for an appropriate handling of risks. 

Pending full implementation of the measures ordered and restoration of compliance with the law, FINMA has prohibited the bank from accepting any new clients with increased money laundering risks. It has also banned all activities that increase operational risks. FINMA has opened three enforcement proceedings against individuals connected to the case. 

The regulator added that it is not disclosing any further details concerning these proceedings or the identity of the individuals concerned. FINMA’s ruling, which has been legally binding since August 2023, has not been contested.