Switzerland's financial regulator took more bankers out of circulation last year. Most of the offenders were top management or compliance lawyers. 

Finma banned six bankers last year, two more than in 2016, according to the Bern-based Swiss financial regulator's annual enforcement report. Some of the bans are as long as five years.

The sanctions, which are disclosed annually without full disclosure of names or firms, are noteworthy in three ways:

  • The majority target top management and compliance officers 
  • Finma found more evidence of attempted market manipulation last year 
  • The banned bankers are appealing to a Swiss tribunal against their sanctioning 

Criminal Cover-Up

One case, in which Finma banned two involved Swiss bankers and top executives, is particularly striking. The case centers on a banker who helped a client conceal transactions, against payment. When the banker moved to another firm into top management, he took the funds with him.

The client in question has since been accused of wrong-doing in coming by the funds. The banker is accused of not informing the second bank, even after prosecutors contacted the firm over the funds. As a result, the bank didn't raise alarm with anti-money laundering authorities.

Client Review Failure

In the end, it was Finma which accused the banker of serious violations of anti-money laundering and notification rules as well as fitness and probity tests. He is appealing the five-year professional ban imposed by Finma.

The same case seems to have spawned a follow-up: Finma relieved the bank's compliance boss of his job, alleging he failed to review the client after prosecutors contacted the bank for information.

Finma concluded that the compliance head was in serious violation of due care and notification rules, as well as fitness and probity requirements. He is also appealing a two-year industry ban.

Ignored Warning Signs

Another sanction centers on a general counsel as well as top compliance officer of a bank who failed to stop suspicious transactions of criminal money, and didn't notify authorities. The bank's own compliance department voiced doubts and Finma identified numerous warning signs: the money's beneficial owners were concealed, documents were suspected of being tampered with, and some transactions belied basic economic logic.

The bank's general counsel, however, did nothing, allowing the transactions to continue without notifying money laundering officials. While he was not part of the bank's top management, Finma deemed his behavior so egregious that the regulator banned him from the industry for two years. He is also appealing the sanction.

In total, Finma concluded 38 enforcement proceedings against 79 parties, which is roughly unchanged from 2016. Five probes were against banks, and one against an asset manager. Finma investigated 17 people individually last year.