MAS Takes Action against BSI Bank in Singapore
On 24 May 2016, the Monetary Authority of Singapore (MAS) gave BSI Bank Limited (BSI Bank) notice that the MAS will:
- withdraw BSI Bank’s status as a merchant bank for serious breaches of anti-money laundering requirements, poor management oversight and gross misconduct of bank staff.
- impose S$13.3 million in financial penalties on BSI Bank for breaches of the MAS Notice to Merchant Banks for the Prevention of Money Laundering and Countering the Financing of Terrorism.
It is worth noting that the MAS has not withdrawn its approval for a merchant bank since 1984.
The MAS has identified the following key breaches of anti-money laundering regulations committed by BSI Bank:
- widespread control failures which led to numerous serious breaches of anti-money laundering regulations;
- poor and ineffective oversight by the senior management of BSI Bank; and
- a pervasive pattern of non-compliance and unacceptable risk culture, with blatant disregard for compliance and control requirements as well as MAS’ regulations. MAS specifically referred to:
- (a) numerous acts of gross misconduct by certain staff; and
- (b) specific regulatory lapses include the processing of multiple unusual transactions which were essentially pass-through trades often without economic substance. MAS stated that approvals of such transactions were based purely on faith of client representations despite deficient documentation and concerns raised by the bank’s compliance officers.
MAS has indicated that it is conducting supervisory reviews of several other financial institutions and bank accounts through which suspicious transactions have passed, and reiterated its requirements that financial institutions in Singapore comply strictly with its anti-money laundering regulations.
Criminal Proceedings against BSI Bank Employees
Significantly, MAS has referred the names of six of BSI Bank’s senior management and staff (being BSI Bank’s CEO, former deputy CEO, the Head of Wealth Management Services, private bankers and a wealth planner) to the Public Prosecutor for review. Singapore’s Attorney-General’s Chambers (AGC) have stated that the findings indicate serious misconduct by BSI Bank senior management and staff. The AGC will be working with the Commercial Affairs Department on the review.
One of the named individuals, former BSI Bank Wealth Planner Yeo Jia Wei, is currently in remand and facing multiple charges, including charges for money laundering, perverting the course of justice, and cheating by dishonest concealment, following investigations into the money flows of a Malaysian state fund.