https://www.finews.com/news/english-news/64390-finma-mirabaud-geldwaescherei-robert-brockman-steuerhinterziehung-enforcementverfahren-2
Mirabaud has committed severe violations of anti-money laundering regulations. In response, Finma has imposed a series of measures that affect corporate governance, the internal control system, and include a comprehensive review of all customer relationships.
Mirabaud & Cie has been sharply criticized by the Swiss Financial Market Supervisory Authority (FINMA) for failing to meet anti-money laundering obligations and committing a serious breach of financial market law. According to a press release on Tuesday, Finma’s enforcement proceedings revealed that Mirabaud insufficiently examined and documented the economic background of its client relationships and transactions. The proceedings, initiated in 2021, were concluded in June 2023.
Mirabaud Resisted Publication
While the enforcement was completed months ago, public communication was delayed as Mirabaud legally challenged the public disclosure of the findings. The Swiss Federal Supreme Court has now rejected this appeal, allowing Finma to proceed with publication. The Finma ruling itself was not contested and has been in effect since August 2023.
Finma launched its investigation based on indications of misconduct related to a complex client structure, reportedly connected to a now-deceased businessman accused of tax evasion. Since 2010, Mirabaud maintained several business relationships with companies and complex structures tied directly or indirectly to this individual. According to Finma, the bank managed up to 1.7 billion Dollar in assets through these relationships, representing nearly 10% of Mirabaud's total client assets at times.
Warnings Ignored
The bank failed to properly assess and document the economic justification and background of numerous transactions, despite clear indications of increased money laundering risks, particularly regarding qualified tax offenses.
Specific warnings about this client relationship date back to 2018. Finma reminds financial intermediaries that, starting in 2016, they have been obligated to examine the background and intent of any transaction or business relationship where there is evidence that assets may stem from criminal activity or tax-related offenses.
Finma concluded that «Mirabaud Bank lacked adequate organization and risk management systems to monitor these business relationships. As a result, the bank seriously violated financial market regulations concerning governance, risk management, and anti-money laundering prevention over an extended period.»
A Stringent Set of Measures
The sanctions imposed by Finma are severe. While Finma acknowledges that the bank cooperated during the proceedings and has already implemented operational, organizational, and personnel changes to address its shortcomings, the measures go further. According to Finma, «In addition to a broad reorganization, Mirabaud has strengthened its anti-money laundering framework, risk management, internal control systems, and governance.»
Reviewing Customer Relationships and Addressing the Past
Finma has mandated additional measures, which will be monitored by an independent auditor. The bank must further refine its anti-money laundering framework, expand its internal control system, and strengthen its corporate governance both structurally and personnel-wise. Additionally, the bank must review all client relationships from a risk perspective.
Mirabaud is also required to examine and, where necessary, retroactively document all high-risk transactions from 2018 to 2022. Furthermore, the bank must align its compensation system with proper risk management practices. Finma is also reclaiming 12.7 million francs in unlawfully earned profits.
Is This the Legacy of Robert Brockman?
The sanctions do not stop there. Mirabaud is prohibited from onboarding new clients with heightened money laundering risks until all measures are fully implemented. Furthermore, the bank has been barred from undertaking any activities that increase operational risks, although specific details of these restrictions were not disclosed. In addition, Finma has initiated three enforcement proceedings against individuals.
While Finma did not disclose names, the customer relationship in question likely involves the late U.S. businessman Robert Brockman, as reported by finews.ch. In early 2021, U.S. tax authorities seized funds that Brockman had deposited at Mirabaud. He passed away in 2022.
