Swiss regulator FINMA has seized $15 million from Geneva-based private bank Mirabaud & Cie for serious breaches of financial market law and money-laundering obligations. The bank failed to conduct proper due diligence on a deceased businessman accused of tax evasion, managing up to $1.7 billion in assets linked to him. Despite Mirabaud‘s efforts to keep the case private, a Swiss court has now made it public.
Key Points:
- The Swiss Financial Market Supervisory Authority FINMA has found that Mirabaud & Cie breached its anti-money laundering obligations and seriously violated financial market law.
- The bank managed assets of up to USD 1.7 billion for a deceased businessman identified by Hubbis as the U.S. national Robert Brockman.
- FINMA confiscated CHF 12.7 million of unlawfully generated profits in favor of the Swiss Federal Treasury and opened three proceedings against individuals.
- Pending full implementation of the measures ordered and restoration of compliance with the law, FINMA has prohibited the bank from accepting any new clients with increased money laundering risks.
Short Narrative:
Swiss financial regulator FINMA has imposed a significant penalty on Geneva-based private bank Mirabaud & Cie, seizing CHF 12.7 million in unlawfully generated profits. The case centers around Mirabaud’s business relationships with companies and financial structures linked to the deceased U.S. businessman Robert Brockman. In October 2020, Brockman was indicted in the U.S. on 39 counts of tax evasion, wire fraud, money laundering, and other offenses. Brockman died in August 2022 at the age of 81 before his case could go to trial. He was accused of hiding over $2 billion in income from the IRS over a 20-year period using secret offshore accounts, encrypted communications, and false documents. It was allegedly the largest tax evasion case in American history.
Despite managing up to $1.7 billion in assets for this client, Mirabaud failed to conduct sufficient checks on these transactions. This case, concluded in 2023, highlights Mirabaud’s shortcomings in AML compliance.
FINMA also mandated that Mirabaud review and re-document high-risk transactions from 2018 to 2022. The bank had attempted to keep the case private, but a Swiss court ruled it could be made public. While Mirabaud claims to have improved its compliance and risk management processes, the regulator’s findings underscore the need for heightened vigilance in preventing financial crimes.
Compliance Insight:
This case highlights the importance of robust AML/KYC measures, particularly for private banks handling high-net-worth clients and complex financial structures. Mirabaud’s failure to sufficiently scrutinize its client relationships and transactions allowed the facilitation of illicit activity, resulting in significant regulatory consequences. Private banks must implement stringent compliance policies to mitigate the risks of money laundering and protect the integrity of the financial system.
Blow the Whistle:
FinTelegram urges insiders to come forward with information about Mirabaud’s past or current compliance failures. We are particularly interested in details about the bank’s relationships with high-risk clients and any gaps in its AML protocols.
