Finma closes probe into UBS Group in 1MDB case

Cases involving other lenders in alleged corruption still ongoing

ZURICH • Switzerland's financial regulator said it is still investigating three private banks in relation to alleged corruption and money laundering at the Malaysian sovereign wealth fund, 1Malaysia Development Bhd (1MDB). A probe of UBS Group in the matter was closed.

"There are still a handful of cases related to 1MDB that have not been concluded," Mr Mark Branson, chief executive of the regulator Finma, told reporters on Tuesday.

Three cases remain unresolved, Finma said in a statement late on Tuesday. A case against UBS was closed recently and the bank, Switzerland's largest, was reprimanded with no further action to be taken, the watchdog said.

The Monetary Authority of Singapore found local anti-money laundering rule violations when it concluded a probe of UBS in October, according to the statement.

Regulators and prosecutors in the United States, Singapore and other jurisdictions have investigated how banks were used to funnel money from alleged corruption at 1MDB, which has denied wrongdoing.

UBS, Switzerland's largest bank, was reprimanded with no further action to be taken, Finma said on Tuesday. The Monetary Authority of Singapore found local anti-money laundering rule violations when it concluded a probe of UBS in October, according to the statement.

Finma, a Bern-based watchdog established in 2007 to oversee banks, insurers and other financial firms, had previously sanctioned three of the nation's lenders over their roles in the affair.

Finma confiscated profits from Coutts in Zurich, after the international private banking unit formerly owned by the Royal Bank of Scotland Group allowed US$2.4 billion (S$3.35 billion) worth of assets related to the Malaysian development fund to flow though its accounts in Switzerland, the regulator said in February.

It also punished Lugano, Switzerland-based BSI and Falcon Private Bank of Zurich last year.

"There will be always cases of money laundering," Mr Branson, a former UBS and Credit Suisse Group AG banker, said on Tuesday. "Our biggest fear is that Swiss institutions or foreign units of Swiss banks get involved in big money laundering cases."

The Swiss regulator is also probing reports of insider trading at several companies, spoofing, which involves flooding the market with orders that are later cancelled when prices move in the direction the spoofer wants, and several cases of front-running, Mr Branson said.

Separately, Finma is in touch with Credit Suisse about offshore tax probes being conducted by Dutch and other tax authorities, he said.

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A version of this article appeared in the print edition of The Straits Times on April 06, 2017, with the headline 'Finma closes probe into UBS Group in 1MDB case'. Print Edition | Subscribe