The Swiss financial regulator will begin investigating individuals working at Julius Baer after the bank was hit with a series of sanctions for dealing in Venezuelan graft money.
Finma chief executive Mark Branson said in an interview published in a Swiss-German language daily newspaper the regulator would look at the behaviour of individuals at the Swiss private bank, with employment bans among the possible punishments for those found to have breached regulations.
"We will now address questions about the responsibility of individuals in a second step," Branson told the Aargauer Zeitung, Reuters reported. "If we identify serious violations of supervisory law, let's see if there are members of management who bear direct causal responsibility for these errors."
If we identify serious violations of supervisory law, let’s see if there are members of management who bear direct causal responsibility for these errors"
At Julius Baer, almost all of the 70 business relationships and the vast majority of more than 150 sample transactions, selected on a risk basis, showed irregularities, Finma said. The incidents occurred from 2009 to early 2018, according to Finma, which added that it also "uncovered systematic failures in risk management."
Julius Baer didn't do enough to determine the identities of clients or establish the purpose or background of its business relationships, Finma said. Information contained in the bank's know-your-customer (KYC) records was "incomplete or ambiguous for the vast majority of the individual relationships," according to Finma.
The sanction for a "poor compliance and risk culture" which did not tackle money laundering with enough vim overlaps almost exactly with the tenure of ex-CEOBoris Collardi.The Swiss banker is now a partner at Geneva's Pictet.
Among the scores of failings at Switzerland's third-largest listed bank, there are cases like the acceptance of a 70 million Swiss franc ($71m) transfer for a Venezuelan customer in 2014 despite knowing he was accused of corruption and connection with alleged corruption at FIFA.
The regulator has no powers to fine or imprison people but can ban individuals from working in the Swiss financial sector. Since Finma began making use of this, 56 bankers have faced been banned.
Individual holdings breach limits