Julius Baer fined over lapses in AML controls

Switzerland's Financial Market Supervisory Authority (FINMA) has ordered domestic lender Julius Baer to pay more than SFr4m ($4.76m) for compliance and anti-money laundering failings in its handling of high-risk clients, the Financial Times reported.

The enforcement decision, dated November 2024, has not been publicly revealed, the publication said.

It focused on the bank's inability to detect or act on suspicious transactions from 2009 to 2019.

The financial regulator’s enforcement action against Julius Baer marks another setback for the bank as it attempts a turnaround.

This follows a significant financial hit from the collapse of the Austrian property group Signa, which led to a leadership overhaul at the bank.

FINMA’s decision, which cites a “serious violation” of money laundering rules, includes an order for Julius Baer to repay SFr3m in unlawfully earned profits for the benefit of the Swiss Confederation and to cover SFr1.3m in costs.

Finma's investigation delved into Julius Baer's management of accounts linked to a Russian banker suspected of embezzlement and several Indian nationals, with whistleblower reports raising concerns.

Despite red flags, the bank continued to manage these accounts, failing to identify and adequately respond to the associated risks.

The regulator also noted issues at the bank's Monaco and Singapore branches.

This decision is separate from the February enforcement proceedings regarding Julius Baer's losses related to Signa, owned by Austrian tycoon René Benko.

The bank has faced previous sanctions from the Swiss regulator for failing to meet anti-money laundering obligations and risk management policies, including a ban on large acquisitions in 2020.

In April, Julius Baer established a major shake-up of its organisational structure, streamlining its operations and reinforcing its strategic emphasis on client-centricity and sustainable growth.

The revamp follows the establishment of the bank’s Executive Board and Global Wealth Management Committee (GWMC), introduced earlier this year in February.

"Julius Baer fined over lapses in AML controls" was originally created and published by Private Banker International, a GlobalData owned brand.

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