Updated Summary Of Miscreants In Global Financial Industry

Tom Burroughes Group Editor 18 June 2020


Here is an updated list of banks and other firms that have been punished for various offences, such as breaches of sanctions.

The “naughty corner” for miscreant banks and other wealth management institutions is getting crowded, demonstrating why compliance is such a major spending and recruitment requirement for firms these days. Charges of interbank rate fixing, lax anti-money laundering controls and questionable pricing policies have been levelled - and in some cases punished heavily.

Some of the failings that have been punished go back several years and, as of the time of writing, firms have moved, or say they have, to clean up their act. Some firms making the headlines are aware of the work that they must embark upon to improve their reputation. These firms must engage as openly as they can with clients (and for that matter, constructive critics such as this publication). Other banks have added to risk management teams in recent months, and no doubt will continue to do so.

Recent months have seen a spate of money laundering scandals in Europe, for example, with jurisdictions such as Denmark, Malta and Latvia affected. Prominent executives at banks such as Danske and ING have resigned. However, it is perhaps in Australia that the most concentrated amount of trouble has erupted, with a raft of banks and wealth management firms found to have broken rules and misled consumers. The country set up a Royal Commission almost a year ago to investigate.

A report by tech firm Fenergo earlier this year found that a total of $36 billion in fines were meted out to firms that failed to comply with anti-money laundering and know-your-client regulations and/or breached sanctions since the global financial crisis of a decade ago. This was a surge of 150 per cent when compared with a report covering the same areas issued 15 months ago. Some 12 of the world’s top 50 banks were fined for compliance shortcomings with AML, KYC and breaching sanctions in 2019. By country, Switzerland was the greatest offender after UBS received the largest single fine by the French Criminal Court of $5.1 billion for AML breaches. The fine exceeds the Zurich-listed bank’s 2018 net profit of $4.9 billion. 

By way of a guide to some of the problems that have hit these firms, here is a summary of the main regulatory incidents. Not all of the cases mentioned are complete and could be subject to further action. The summary here is in no way a comment by this publication as to the specific responsibility of the firms concerned.

We also invite readers who want to comment on what is being done to improve compliance to share their thoughts with us, and they can email the editor at

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The UK’s Financial Conduct Authority has fined one of Germany’s largest banks, Commerzbank, for its London branch’s failure to put in adequate anti-money laundering controls over almost five years. 

The FCA fined the bank £37.8 million ($47.5 million) for the failings in its systems and controls in a period spanning October 2012 through to and September 2017.

Julius Baer
Julius Baer “fell significantly short” of fighting money laundering in a nine-year period, Switzerland’s main financial regulator said yesterday. The failings were linked to alleged corruption cases involving Venezuelan state-owned oil group PDVSA and scandal-hit global football body FIFA. 

The bank has also been banned from large and complex acquisitions until it fully complies with the law. The Swiss Financial Market and Supervisory Authority, or FINMA, said in a statement that its enforcement proceedings on Zurich-listed Julius Baer have ended. 

“The proceedings, now concluded, found that Julius Baer was in breach of obligations to combat money laundering and its duty to put in place an appropriate risk management policy, representing a serious infringement of financial market law,” FINMA said. The offences were not confined to a single advisor.


Standard Chartered 
The bank agreed to pay $639 million in a settlement with the US government over breaching sanctions against a number of countries including Iran, Sudan and Cuba. The breaches took place from June 2009 to June 2014, affecting a total of 9,355 transactions to or via the US. The department said that the settlement is part of a wider $1.1 billion settlement with federal, state, local, and UK government partners.

The settlement was reached with the US Department of the Treasury’s Office of Foreign Assets Control. The sanctions violations involved Cuba, Iran, Sudan and Syria. The UK-listed bank, which earns the bulk of its earnings in regions such as Asia and Africa, also agreed to settle its potential civil liability for apparent violations of the Zimbabwe Sanctions Regulations. The bank agreed to remit more than $18 million.

Goldman Sachs
The UK's Financial Conduct Authority fined Goldman Sachs International, part of US-listed Goldman Sachs, a total of £34.3 million ($44.9 million) for not providing accurate and timely reports of more than 200 million transactions over a period of almost 10 years. GSI failed to ensure that it provided complete, accurate and timely information in relation to approximately 213.6 million reportable transactions. It also erroneously reported 6.6 million transactions to the FCA, which were not, in fact, reportable. Altogether, over a period of nine and a half years, GSI made 220.2 million errors in its transaction reporting, breaching FCA rules. The period covered by the failings ran between November 2007 and March 2017.

Swedbank, accused of anti-money laundering failings amid a brewing financial scandal in the Nordics, fired its chief executive, Birgitte Bonnesen. The bank’s board appointed chief financial officer, Anders Karlsson, as acting president and CEO. 

Monetary Authority of Singapore
In March 2019, MAS said that it had meted out S$16.8 million in financial penalties, almost S$700,000 in civil fines in the period from the middle of 2017 to the end of last year. The Monetary Authority of Singapore also issued 19 prohibition orders that block individuals from working in the financial industry, 37 reprimands and 223 warnings, the organisation said in its first enforcement report. The report is issued once every 18 months. 

The bank was been fined £27.6 million ($36.6 million) by the UK Financial Conduct Authority for failings relating to 135.8 million transaction reports between November 2007 and May 2017. The bank failed to ensure that it provided complete and accurate information in relation to approximately 86.67 million reportable transactions. It also erroneously reported 49.1 million transactions to the FCA, which were not, in fact, reportable. Altogether, over a period of nine and a half years, UBS made 135.8m errors in its transaction reporting, breaching FCA rules. The FCA also found that UBS failed to take reasonable care to organise and control its affairs responsibly and effectively in respect of its transaction reporting. These failings related to aspects of UBS’s change management processes, its maintenance of the reference data used in its reporting, and how it tested whether all the transactions it reported to the FCA were accurate and complete.

Financial Conduct Authority
The FCA found that three investment firms – Newton, River & Mercantile and Hargreave Hale broke competition laws. This was the first such competition case the FCA has brought. The watchdog fined Hargreave Hale £306,300 and River and Mercantile Asset Management £108,600. The FCA did not impose a fine on Newton Investment Management because it was given immunity under the competition leniency programme.

Julius Baer
The Swiss private bank concluded its deferred prosecution agreement with the US Department of Justice to settle a liability linked to its legacy cross-border US banking business. By fulfilling its DPA obligations, the US Attorney’s Office for the Southern District of New York filed a motion to dismiss the charges against the bank.

Morgan Gatsby
The financial services group providing services, including wealth management, was suspended from operating in Dubai by the local regulator because of “serious concerns” over a number of failings. The licence was suspended by the Dubai Financial Services Authority, the regulator for the Dubai International Financial Centre, the local jurisdiction.

In October, the country's regulator froze accounts of former clients of the Maltese bank, because of money laundering concerns, and launched a campaign warning about doing business in the Mediterranean island. Satabank ceased operations after accounts were shut down by the Malta Financial Services Authority. Reports said that more than 10,000 company accounts have been blocked.

Societe Generale
US authorities agreed a $1.3 billion settlement with French bank Societe Generale to resolve its breach of US sanctions against Iran, Cuba and Sudan. The settlement covered agreements by the bank with the Federal Reserve, the US Justice Department and various legal authorities in New York. The US Treasury department’s Office of Foreign Assets Control said that the Paris-based bank processed 1,077 transactions totalling more than $5.56 billion.

The European Central Bank withdrew the banking licence for Pilatus Bank, a Malta-based organisation embroiled in a money laundering scandal. European authorities tightened the screws on the bank after US authorities charged its former chairman and owner, Seyed Ali Sadr Hasheminejad, with plotting to circumvent US sanctions against Iran.


In May, Denmark’s financial regulator told Danske Bank it needed to bolster its capital by DKK5 billion ($803 million), and imposed eight orders and eight reprimands on the lender. In February, Estonia’s financial watchdog said it would open an investigation into the lender after media reports claimed it had been aware of money laundering allegations at its Estonian business as far back as 2013. Estonia’s general prosecutor started a criminal investigation of Danske Bank – which had already been warned it needs to bolster its capital – over claims that the Danish bank was involved in money laundering via the Baltic nation. The bank saw a number of high-profile figures depart having been hit by a money laundering scandal centred on its Estonian operations. It employed a new compliance boss, while its recent financial results showed a fall in profits.

Credit Suisse
Switzerland’s financial regulator uncovered shortcomings around the anti-money laundering controls of Credit Suisse, such as involving suspected corruption of the global soccer organisation FIFA, and a major business relationship connected to a politically exposed person.

The Swiss Financial Market Supervisory Authority, FINMA, said that it had completed two enforcement procedures against Credit Suisse. The review covered cases originating in the period between 2006 and 2014. The Zurich-listed bank noted that “FINMA has not imposed any fine on Credit Suisse, not ordered any disgorgement of profits nor any limitation of business activities”. It said it had taken a number of steps in recent years to improve its procedures.

FINMA said it found failings in how the bank upheld AML due diligence obligations in relation to suspected corruption involving FIFA, the Brazilian oil corporation Petrobras, and the Venezuelan oil corporation Petróleos de Venezuela. In a second case, FINMA probed “a significant business relationship for the bank with a politically exposed person”. “In this instance too, FINMA identified deficiencies in the anti-money laundering process, as well as shortcomings in the bank's control mechanisms and risk management,” it said. (The PEP was not identified in FINMA's statement.)

ING agreed to pay a total of €675 million ($784.6 million) in fines and €100 million in disgorgement after admitting to money laundering lapses in a six-year period. The fine was one of the largest of its type against a Netherlands-based financial organisation. The group said it acknowledged that there had been “serious shortcomings in the execution of customer due diligence policies to prevent financial economic crime at ING Netherlands in the period investigated (2010-2016)."

Standard Chartered
Standard Chartered agreed to a further extension of its US deferred prosecution agreements (DPAs) until the end of December 2018. The group entered into the DPAs with the US Department of Justice and the New York County District Attorney’s Office in December 2012, accepting that it had broken laws by processing payments for sanctions targets in countries including Iran, Burma, Sudan and Libya. The bank avoided prosecution in exchange for a cash settlement of $327 million and an agreement with the US authorities to improve its sanctions compliance.

A US regulator rapped UBS for a series of deficiencies in its anti-money laundering systems in its New York, Connecticut and Florida branches. The Office of the Comptroller of the Currency, which censured the world’s biggest wealth manager, did not, however, impose a financial penalty.

Commonwealth Bank of Australia
In early June, CBA agreed to pay a civil penalty of A$700 million ($535.2 million) to authorities for failing to immediately report more than 53,500 suspicious transactions, one of the worst financial scandals in the country’s history. The lender said it had entered into an agreement with Austrac, the Australian Government’s financial intelligence agency, to resolve the civil proceedings commenced by the watchdog in the Federal Court of Australia on 3 August the previous year. The agreement, which had to be cleared by a court, would involve the largest fine of its kind in Australian history. 

At the heart of the affair were late filings of 53,506 Threshold Transaction Reports for cash deposits through Intelligent Deposit Machines (IDMs). The bank also inadequately followed risk assessment requirements on IDMs on 14 occasions. Transaction monitoring did not operate as intended on a number of accounts from October 2012 and October 2015. Some 149 Suspicious Matter Reports were filed late or were not filed as required. Due diligence tests on clients were broken in the case of 80 customers. Senior executives have left the bank, including its chief executive, Ian Narev, who brought forward his retirement, and was replaced by Matt Comyn.

Australia and New Zealand Banking Group 
In April, ANZ was ordered to pay A$3 million and submit regular reviews of its systems and processes after billing thousands of wealth management clients for services they did not receive. The order, imposed by ASIC, also required ANZ to provide an audited attestation from senior management to show “reasonable assurance” that the lender had, since 2014, provided clients with documented annual reviews. In addition, the bank had to demonstrate that it had improved its compliance functions.

Employees’ testimonies to the Royal Commission revealed that AMP had charged clients for advice they never received and then lied to the Australian Securities and Investment Commission (ASIC) about the practice for nearly 10 years. The chief executive of AMP, Craig Meller resigned in April after a probe revealed that his firm had engaged in widespread misconduct. Meller had been the chief executive since 2014. Shares in AMP fell after the main revelations emerged. The firm was hit with multiple class-action lawsuits by irate shareholders.

Dover Financial Advisers
The 400 advisor-strong group, with about $2.3 billion in assets under management, is closing down. It had been under investigation by the ASIC since the previous year, with the heat intensifying under the Royal Commission’s own scrutiny. Dover and owner Terry McMaster ceased operations after receiving notice of a hearing into suspending or cancelling its licence.

The bank was obliged to defend how it structured its private wealth unit’s employment contracts after a group of 15 former advisors sued it. A statement of claim, lodged with the Federal Circuit Court of Australia in June 2018, alleged that there was a string of breaches of the Fair Work Act by Macquarie's banking division (source: Australian Financial Review). AFR said that potential breaches related to claims of underpaying advisors' entitlements spanning their annual leave, public holidays, leave loading and compassionate and carer's leave. The group of former private client advisors claimed that Macquarie failed to comply with National Employment Standards and the modern award covering the banking, finance and insurance industry. The John Wardman-led group sought reimbursement for total underpayments of A$2.6 million plus interest, penalties and legal costs and wanted Macquarie to be issued with pecuniary fines.

Malta’s financial regulator froze transactions by Pilatus Bank, which is registered in the island, following news that the lender’s chairman had been arrested by US authorities for allegedly helping to breach sanctions against Iran. Ali Sadr Hasheminejad, 38, faced charges concerning his alleged involvement in helping funnel Iranian funds through the US financial system. Pilatus, which is registered in Malta and has an office in London, has been registered with the Malta Financial Services Authority since 2013, and was granted a licence in 2015.

The watchdog ordered that Sadr be immediately removed from his position of bank director and from any other executive positions he holds at Pilatus; it also suspended his voting rights as a bank shareholder. Further, MFSA said Pilatus must not allow “any banking transactions, including withdrawals or deposits held with the bank by the shareholder, members of the board of directors and senior management officials of the bank, or related persons thereto, whether direct or indirect”.

HSBC agreed to pay $100 million to terminate US litigation alleging that the bank conspired to rig Libor, the key benchmark interest rate.

US authorities fined US Bancorp more than $600 million and charged it with two criminal violations of the Bank Secrecy Act over lapses in its anti-money laundering (AML) regime. The US’s fifth-largest bank by assets ran its AML programme “on the cheap” by capping staff numbers and placing hard caps on the number of alerts generated by its transaction monitors, the US Department of Justice (DoJ) said.

US Bancorp entered into a two-year deferred prosecution agreement with the US Attorney’s Office in New York, which fined it $453 million. The Office of the Comptroller of the Currency (OCC) issued a $75 million penalty, Financial Crimes Enforcement Network (FinCEN) billed Bancorp $70 million, and the Federal Reserve $15 million, totalling $613 million.

The US Department of Justice charged eight individuals from three banking giants over allegations that they manipulated the futures markets for precious metals and share indexes, through a process known as “spoofing”. UBS, the world’s largest wealth manager, HSBC and Deutsche Bank paid a combined total of $46.6 million to settle the charges against them. Seven of the individuals charged were traders and one was a technology consultant. Spoofing refers to traders submitting, then cancelling, orders on futures contracts to manipulate the quoted price.

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