The Singapore branches of Standard Chartered and Coutts have been fined $5.2 million and $2.4 million, respectively, for money-laundering lapses related to scandal-hit 1Malaysia Development Berhad (1MDB).
These are the latest sanctions handed down by regulators in connection with the case in which several banks based here were used to move funds illicitly.
The Monetary Authority of Singapore (MAS) also plans to ban former Goldman Sachs top banker Tim Leissner from its securities industry for 10 years. Earlier this year, MAS withdrew the banking licences of Falcon Private Bank and BSI SA's Singapore units, and fined UBS Group and DBS Group $1.3 million and $1 million respectively.
Mr Ravi Menon, MAS' managing director, said: "These actions send a strong signal that we will not tolerate the abuse of Singapore's financial system for illicit purposes."
Mr Leissner, who helped raise over US$6 billion (S$8.5 billion) for 1MDB with three bond sales, from 2012 to 2013, has been singled out for issuing an unauthorised reference letter that vouched for Malaysian tycoon Low Taek Jho and his family. Mr Leissner's statements that there were no money-laundering concerns were false, and made without the bank's knowledge or consent, MAS said.
These actions send a strong signal that we will not tolerate the abuse of Singapore's financial system for illicit purposes.
MR RAVI MENON, MAS' managing director.
A director of Goldman Singapore from June 2007 to September 2011, Mr Leissner moved to Hong Kong in November 2011 but maintained his representative status with the Singapore office till he quit this February. He is therefore subject to MAS' requirements to be fit and proper to carry out regulated activities.
Goldman, which earned close to US$600 million from the 1MDB bond sales, is not accused of wrongdoing. But MAS said it is working with foreign counterparts to examine the bank's role in the bond transactions. Goldman yesterday said it took prompt steps to part ways with Mr Leissner after discovering the violations in January this year, and reported it to the authorities in several jurisdictions, including Singapore. Mr Leissner was subpoenaed by the US Justice Department in March as part of its 1MDB probe.
Mr Marc Harris, a lawyer for Mr Leissner, said that his client "looks forward" to responding to the allegations.
StanChart was fined $5.2 million for 28 regulatory breaches. While these breaches were serious, MAS had not found pervasive control weaknesses or wilful misconduct.
The bank expressed regret "that 1MDB-related transactions passed through its Singapore accounts from 2010 to early 2013". The suspicious transactions were reported to the authorities before Stanchart closed the accounts in early 2013, and disciplinary action taken against individual employees.
Transfers totalling US$636 million were sent in 2012 from a Swiss bank account to a StanChart account here held in the name of Blackstone Asia Real Estate Partners, a firm owned by Mr Low's associate Eric Tan Kim Loong, US prosecutors alleged earlier.
Coutts was fined $2.4 million for 24 breaches, including "failing to meet due diligence requirements for politically exposed persons". These lapses were the result of "actions or omissions" of some employees, including Yak Yew Chee and Yvonne Seah, who left Coutts to join BSI bank in Singapore in 2009.
Yak pleaded guilty last month to four of seven counts of forging documents and failing to report suspicious transactions. He was jailed for 18 weeks and fined $24,000. Seah faces seven similar counts.
Coutts expressed regrets over "failings in its anti money-laundering processes".