FINMA, SFC, and MAS Fine Multiple Financial Institutions Over $1.5 Billion For Money Laundering Activities

FINMA, SFC, and MAS fined multiple financial institutions over $1.5 billion for not complying with AML and CFT regulations.

Swiss Financial Market Supervisory Authority FINMA has alleged HSBC (Suisse) SA  Private Bank for anti-money laundering failings. This resulted from enforcement proceedings conducted by the watchdog in December 2021, which focused on the bank’s relationship with anonymous Politically Exposed Persons (PEPs).

“HSBC Private Bank (Suisse) SA operated two high-risk business relationships where it failed to carry out an adequate check of either the origins, purpose or background of the assets involved,” FINMA said in the release. “In addition, several high-risk transactions were insufficiently clarified and documented, making it impossible to establish the legitimate nature of these transactions.”

These suspicious transactions amounted to more than $300 million and were conducted between 2002 and 2015. They involved funds originating from government institutions, which were carried out from Switzerland to Lebanon and routed back to Lebanon. According to the BSBC statement to PYMNTS, the bank plans to appeal the decision.

“We acknowledge the matters raised by FINMA, which are historic,” the statement said. “HSBC takes its Anti-Money Laundering [AML] obligations very seriously, including complying with all laws and regulations in every market we operate. As we plan to appeal the decision, it would be inappropriate to comment further.”

The regulatory authority stated in its press release that the Bank is obliged not to form new business relationships with PEPs until they review its AML in-house controls associated with building relationships with high-risk or PEPs, checks related to categorization of risks presented by customers, and all these factors are being confirmed by an audit agent.

In addition, the bank is mandated to share details about the board of directors and executive management responsibilities and the criteria for assigning those details to FINMA.

Like FINMA, the Securities and Futures Commission (SFC) of Hong Kong has also taken more strict measures against fraudsters linked to crimes such as insider trading, market manipulation, and corporate fraud. 

Over the last 12 months, SFC has conducted 183 investigations and alleged more than 50 criminal charges against 20+ fraudsters. “We take proactive and resolute enforcement actions to protect investors, punish wrongdoers, and safeguard the reputation and integrity of our markets. Our strategic focus on high-impact cases helps us address key risks in financial markets and send strong deterrent messages,” SFC commented in the report.

To enhance the surveillance measures, the watchdog has issued more than 4,000 requests for trading and account records from trading brokers while posting an alert for investors to make them aware of highly concentrated ownerships associated with trading stocks.

“By leveraging our surveillance capabilities combined with data analytics, resources can now be directed towards cases of high impact and high strategic value that will have the desired deterrence effect,” the SFC said. The watchdog also states that its new investor verification system launched in 2023 has significantly impacted SFC’s ability to identify suspicious trading activities and patterns in real-time.

“The achievements we made and valuable experience gained over the years will stand us in good stead to steer Hong Kong’s capital markets,” said the SFC’s Chairman Tim Lui. “To this end, we remain steadfast in our commitment to ensuring market integrity and resilience in the face of emerging trends and new challenges at the local, regional, and global levels.”

Singapore has also taken strict measures to restrict criminals from manipulating the country’s banking system. Regulatory authorities have seized more than $1 billion from multiple accounts linked to 10 alleged individuals and 17 suspects in laundering illicit gains. The confiscated assets include cash, digital currencies, real estate, and other luxury items.

This case has highlighted the significant loopholes within the country’s financial system, making it an eye-opener for the regulatory authorities to enhance regulations on hedge funds and family offices. In addition, Singapore’s financial watchdogs have increased the closure of dormant organizations as a part of drives to fight money laundering activities.

The country is striving to curb money laundering from its financial system. Yet, it needs help to enhance its protection against crimes due to money laundering from crimes committed outside the country. Banks are identified as the most vulnerable sectors due to the widespread digital financial services offering electronic transfers.

Despite this alarming situation, Singapore’s Monetary Authority (MAS) has significantly changed the Payment Services Act, broadening the scope to cover Digital Payment Tokens (DPTs) while bolstering user protection. Furthermore, this amendment also empowers MAS to enforce AML and CFT laws on DPT service providers.

Suggested Read:

https://shuftipro.com/news/nigeria-myanmar-and-turkiye-take-effective-steps-to-meet-fatf-recommendations/

https://shuftipro.com/news/regulatory-authorities-fines-td-bank-adelaide-casino-and-sbi-over-dollar-500-million-for-aml-failings/

https://shuftipro.com/news/mfsa-sec-along-with-fca-introduces-new-aml-guidelines-for-money-laundering-officers-and-virtual-asset-service-providers/