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The Monetary Authority of Singapore and the country’s police force have sanctioned a senior banker for failing to file suspicious transaction reports (STRs) at BSI Bank.
Raj Sriram, a former deputy chief executive at the Swiss bank’s Singapore branch, has been issued a 24-month conditional warning from the Singapore Police Force’s Commercial Affairs Department (CAD) and a ten-year prohibition order (PO) by the MAS.
“The suspicious transaction reporting regime is a key pillar of Singapore’s approach to anti-money laundering and countering the financing of terrorism,” said David Chew, managing director of CAD, in a statement.
The Singapore authorities take a serious view of the obligation to file such reports, and strongly urge reporting entities to remain vigilant in detecting and reporting suspicious transactions, Chew said.
“Officers of a financial institution are responsible for upholding the STR regime,” he said. “The Singapore authorities will not hesitate to take firm action against reporting entities or their officers, who intentionally or negligently fail to file suspicious transaction reports when legally obliged to do so.”
In Singapore, a prohibition order means that those served with them are restricted from performing any regulated activity under the city state’s Securities and Futures Act and/or the Financial Advisers Act.
In this instance, Sriram is prevented from activities under the latter.
Those charged are also barred from taking part, directly or indirectly, in the management of, acting as a director of, or becoming a substantial shareholder of, any capital market services and/or financial advisory firms in scope of the two pieces of legislation.
The MAS has already served three other prohibition orders this year, focusing on issues such as false trading and dishonest conduct.
BSI Bank failure
The case revolves around transactions with 1Malaysia Development Berhad (1MDB), Malaysia’s sovereign wealth fund.
It was at the centre of a global scandal after it was revealed that funds had been embezzled by Malaysia’s then Prime Minister Mahathir Mohamad, with billions diverted into his personal bank account.
CAD investigated Sriram in relation to his role in BSI’s Singapore branch, which has since had its licence revoked by the MAS.
The investigation looked into 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.
The police found that there were reasonable grounds for BSI to file STRs in respect of 1MDB related transactions, as required under the MAS’ anti-money laundering requirements.
Subsequently, Sriam was charged and has now been made to pay $150,000 to the Singapore government’s Consolidated Fund.
He is also required to cooperate in future with relevant investigations, and not accept any directorship positions or positions of similar substance or form for a period of four years. However, this was backdated to September 2021.
“BSIS, of which Mr Sriram was Deputy CEO and Head of Private Banking, was a key conduit for tainted funds in the 1MDB debacle,” said Ho Hern Shin, deputy managing director at the MAS.
"The ultimate responsibility for ensuring a financial institution’s compliance with AML/CFT laws and regulations rests with its board of directors and senior management,” she continued.
“MAS will take to task errant board and senior management members whose failures result in their financial institutions violating laws and regulations.”
