Singapore’s central bank said it had penalised the local units of Standard Chartered and Coutts for money-laundering breaches related to Malaysia’s scandal-tainted 1MDB fund and proposed a 10-year ban for Tim Leissner, the former Goldman Sachs banker who managed the 1MDB relationship.
The penalties of S$5.2m (US$3.65m) for StanChart and S$2.4m for Coutts, respectively, are the latest punitive measures the Monetary Authority of Singapore has taken in its crackdown on money laundering, having ordered the closure earlier this year of the local units of Swiss banks BSI and Falcon.
The inspection at StanChart “revealed significant lapses in the bank’s customer due diligence measures and controls for ongoing monitoring”, the MAS said.
While the 28 breaches were “serious”, the central bank did not find “wilful misconduct”.
StanChart said it was taking action to strengthen controls and surveillance systems.
“We regret that 1MDB-related transactions passed through Standard Chartered Bank Singapore accounts from 2010 to early 2013,” the bank said. “We reported the suspicious transactions, both before and at the time we exited the accounts in early 2013, and have been fully cooperating with the authorities investigating this matter.”
1MDB is the subject of money-laundering investigations in at least six countries, including Switzerland, Singapore and the US. It was once a pet project of Malaysian Prime Minister Najib Razak, who chaired its advisory board.
At private bank Coutts, the investigation revealed 24 breaches of AML requirements in relation to customer due diligence measures for politically exposed persons.
MAS is also about to issue a prohibition order against Tim Leissner, a former director and representative of Goldman Sachs Singapore. The MAS investigation found he had made false statements in 2015 vouching for Malaysian businessman Jho Low on behalf of his bank without its knowledge or consent. US prosecutors allege Low diverted funds from 1MDB for his own use.
Leissner was responsible for managing the relationship with 1MDB when the fund hired Goldman Sachs to arrange three bond issues from 2012 to 2013. He left the bank earlier this year.
“Today’s announcement refers to a matter we discovered in January of this year and identified as a clear violation of the firm’s standards … We continue to cooperate with the MAS,” Goldman said in a statement.
The proposed order will prohibit Leissner for a period of 10 years from performing any regulated activity under the Securities and Futures Act or taking part, directly or indirectly, in the management of any capital market services firm in Singapore.
The central bank said it was nearing the end of its 1MDB-related investigations and would provide a final update early next year.