Prosecutors in Holland are more closely scrutinizing UBS CEO Ralph Hamers' role in a 2018 money laundering scandal. The news comes five weeks into his tenure at the Swiss bank.

UBS boss Ralph Hamers is in Switzerland but can't quite put his old job running ING behind him: a court in The Hague ordered him to be investigated in connection with the settlement of a money laundering scandal two years ago for 775 million euros ($939 million), the Dutch bank said in a statement on Wednesday.

The move is a blow for Hamers, a top banking CEO talent sought by HSBC as well as UBS. After taking over from long-standing CEO Sergio Ermotti last month, Hamers is being closely watched for how he will kickstart the Swiss bank's innovation efforts as well as streamline its hidebound organization.

Public Responsibility

The renewed scrutiny of him stems from a legal challenge to the 2018 settlement – which ironically came out in the bank's favor. «However, in a separate ruling, the court ordered the prosecution of ING’s former CEO,» the bank said.

ING took responsibility for its actions at the time and upgraded its compliance efforts, but the court noted «no settlement has been reached with the executive himself, nor has he taken public responsibility for his actions.» It added that Dutch taxpayers «must be able to see that such actions are not accepted by the government.»

Swiss Kerfuffle

At UBS, no stranger to criminal investigations over money laundering, a spokesman said it has «full confidence in Ralph Hamers’ ability to lead UBS,» according to several media reports. A spokesman for Swiss regulator Finma said Hamers had passed fitness and probity tests conducted before UBS appointed him.

Nevertheless, UBS chairman Axel Weber underscored the delicacy in addressing the Swiss wealth manager's more than 68,000 staff immediately, according to «Bloomberg». UBS had extensively reviewed Hamers' background during the succession process, including having him vetted by undisclosed third parties. 

«We were fully satisfied with the results of these independent evaluations and the assessment of the Dutch prosecutor at the time,» Weber said. Then, the public prosecutor said it didn't find ample evidence for charging any individuals at ING.