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Harry Cassin
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Thomas Fox
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Marc Alain Bohn
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Swiss regulator: JPMorgan Chase ‘seriously breached’ AML laws with 1MDB

Switzerland’s financial regulator said Thursday that JPMorgan Chase & Co. seriously breached anti-money laundering regulations in its dealings with Malaysian sovereign wealth fund 1MDB.

The Swiss Financial Market Supervisory Authority or FINMA said JPMorgan also failed to manage PEP risks related 1MDB.

The agency appointed a monitor to review JPMorgan’s controls on an ongoing basis. It didn’t impose any financial or other penalties on the bank.

JPMorgan credited “hundreds of millions” of U.S. dollars from 1MDB to the personal account of an individual with close ties to a business partner of the sovereign wealth fund, FINMA said.

The bank also accepted incomplete or inconsistent information from clients without examining it further or documenting it, the Swiss regulator said.

More than $4.5 billion was allegedly looted from 1Malaysia Development Berhad from 2009 through 2015 “by high-level officials” of the fund and their associates, the U.S. DOJ said.

The DOJ has filed forfeiture actions against nearly $1.7 billion in assets linked to 1MDB.

Last year Singapore seized property and bank accounts worth about $177 million linked to money allegedly diverted from 1MDB.

The Monetary Authority of Singapore stripped BSI Bank and Falcon Bank of their licenses because of money-laundering violations related to 1MDB.

MAS also fined DBS Bank about $720,000, Standard Chartered Bank $3.7 million, and Coutts & Co $1.73 million.

MAS sanctioned ten individuals for 1MDB-related offenses.

Tim Leissner, the former chief of Goldman Sachs (Southeast Asia), was banned from the Singapore financial sector for ten years.

In October this year, Wall Street’s independent regulator banned Leissner from the U.S. securities industry after he said he wouldn’t cooperate with the regulator’s investigation.

Leissner didn’t respond to requests from the Financial Industry Regulatory Authority for documents and other information related to his departure from Goldman Sachs in 2016.

Switzerland’s FINMA said Thursday:

J.P. Morgan failed to adequately identify the increased money laundering risks in some of the business relationships related to this case. In other relationships, while the bank correctly identified the clients as politically exposed persons (PEPs), it managed the increased risks arising from these relationships inadequately.

FINMA has brought a total of seven cases in Switzerland in relation to 1MDB. It said Thursday without elaborating that one case remains open.


Richard L. Cassin is the publisher and editor of the FCPA Blog.

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