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16

Falcon Bank managers ignored 1MDB red flags

Falcon Bank managers ignored 1MDB red flags

Employees alerted top managers to suspicious transactions but two Falcon Bank board members insisted the transactions be pushed through, says Swiss regulator.

KUALA LUMPUR: Managers at Falcon Bank, against whom Singapore and Swiss financial regulators have taken action, were alerted by employees to possible shady activities but chose to ignore them.

According to Swiss regulator Finma, bank managers were under pressure from two board members with 1Malaysia Development Bhd ties to approve USD3.8 billion of asset transfers linked to the fund from 2012 to mid-2015.

“Although management’s attention was drawn to these matters, it repeatedly failed to properly investigate the business relationships, specifically those with politically exposed persons, and high-risk transactions,”Finma, said in a statement.

These latest developments in the 1MDB scandal shed further light on how international banks allegedly aided in the misuse of 1MDB funds meant for economic development, according to a Bloomberg report.

Finma said Zurich-based Falcon Private Bank’s managers were focused on making sure 1MDB’s transactions went smoothly and that they attached “great significance” to the accounts because two of the bank’s board members had initiated the 1MDB relationship.

Finma said both board members pursued their own “illegitimate purposes”. It added that they had since left the board and that there was no evidence other board members of Falcon were implicated.

The Bloomberg report said Falcon and its main shareholder, Aabar Investments PJS, welcomed the completion of investigations by Finma and the Monetary Authority of Singapore, which also released results of an investigation into Falcon on Tuesday.

“Following a constructive dialogue, this completion finally resolves the 1MDB topic for the Bank with the regulators,” Falcon said, without disputing the regulators’ findings or indicating that the firm will challenge them, Bloomberg reported.

“Safeguarding the Bank’s reputation and the adherence to all laws, regulations and rules is of highest importance to Falcon Private Bank and its employees.”

1MDB has consistently denied wrongdoing and Malaysia’s Government has said it will cooperate with lawful investigations of local companies or its citizens in relation to the fund.

Bloomberg said 1MDB didn’t respond to an e-mail seeking comment on Tuesday.

Among the questionable Falcon dealings highlighted by Swiss authorities was a USD681 million “pass through” transaction in an unnamed Malaysian businessman’s accounts, Bloomberg reported.

“While the Swiss statement didn’t provide details on where the USD681 million ended up, the figure matches what Najib has acknowledged receiving in his own accounts before the country’s 2013 general election.

…more
Falcon Bank managers ignored 1MDB red flags
October 12, 2016 – FMT


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