Compliance
Singapore Acts Against Former BSIS Private Banking Head Over Reporting Failings
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The 1MDB scandal – one of the largest money laundering episodes of its kind in the world – rocked financial centres in Singapore, Switzerland and the US, among others.
Law enforcement and regulatory authorities in Singapore have issued a two-year conditional warning and imposed a 10-year prohibition order on the former private banking head for BSI Bank Limited, Singapore branch, for BSIS’s failure to file alerts over 1MBD-linked transactions.
The Singapore Police Force’s Commercial Affairs Department (CAD) imposed the conditional warning on Raj Sriram, while the Monetary Authority of Singapore imposed the prohibition order on Sriram. BSIS failed to file suspicious transaction reports regarding 1Malaysia Development Berhad-related transactions.
The 1MDB scandal – one of the largest money laundering episodes of its kind in the world – rocked financial centres in Singapore, Switzerland and the US, among others.
In August, Malaysia's top court ordered former prime minister Najib Razak to begin a 12-year prison sentence. It upheld a guilty conviction on charges related to the 1MDB case. Several financial institutions, such as Goldman Sachs and Switzerland’s BSI, among others, were embroiled. Goldman Sachs, for example, paid $3.9 billion to settle its case – about $4.5 billion was siphoned off from the government-created 1MDB fund. The Najib administration formed 1MDB in 2009 and the former premier was accused of taking more than a $1 billion from it.
CAD investigated Sriram in relation to his role in BSIS’ business dealings and relationships with the subsidiaries of 1MDB and Aabar Investments PJS Limited, the purported subsidiary of the Abu Dhabi-based Aabar Investments PJS, according to a statement this week from MAS.
CAD found that there were reasonable grounds for BSIS to file STRs in respect of 1MDB-related transactions, as required under MAS rules on fighting money laundering and financing terrorism.
“Due to Mr Sriram’s neglect, BSIS did not file the STRs,” the statement from MAS said.
Under the conditional warning, Sriram paid a sum of $150,000 to the Singapore Government’s Consolidated Fund; and committed to (i) refrain from criminal conduct for a period of 24 months; (ii) continue to cooperate with CAD in its 1MDB-related investigations; and (iii) not accept any directorship positions or positions of similar substance or form for a period of four years from 6 September 2021.
MAS reviewed Sriram’s conduct as a former regulated representative during his term at BSI and decided that his conduct warranted a 10-year prohibition order because he held a senior position at BSIS and his neglect had contributed to BSIS’ failure to file the STRs.
The prohibition order took effect on 10 October 2022. It means that Sriram cannot provide any financial advisory service or take part in the management of, acting as a director of, or becoming a substantial shareholder of, any financial advisory firm under the Financial Advisers Act.