Swiss watchdog fined Coutts over 1MDB money laundering breaches

The Swiss financial markets regulator (FINMA) ordered private bank Coutts & Co to pay back 6.5 million Swiss francs for having “seriously breached” money laundering rules by failing to fully monitor its business with indebted Malaysian sovereign wealth fund 1MDB.

Coutts, owned by Royal Bank of Scotland Group Plc, "failed to adequately clarify the circumstances surrounding a number of business relationships and unusually large, high-risk transactions," FINMA said in a statement.

It said a total of $2.4 bn in 1MDB-related assets moved through Coutts accounts in Switzerland, referring to a probe of operations conducted between 2009 and 2015.

The bank also ignored internal warnings from some of its employees, Finma said. The wealth fund, which has consistently denied wrongdoing, is at the center of several international investigations into alleged corruption and money laundering by public officials. In December, the Monetary Authority of Singapore imposed a 2.4 million Singapore dollar ($1.7 million) fine on Coutts for anti-money laundering breaches at its branch there.

FINMA on Thursday cited “serious deficiencies” in the anti-money laundering processes at the Swiss arm of Coutts, the first Swiss bank to accept assets from individuals with what would become the Malaysian fund.

Coutts was sold by Royal Bank of Scotland to Union Bancaire Privée in March 2015.