26 Oct 2020
Switzerland’s Julius Baer will withhold millions of francs in bonuses from two former chief executives after an internal investigation faulted the pair for failing to protect the bank from a South American money laundering scandal, the Financial Times reported.
The Swiss wealth manager is seeking to withhold more than SFr2.5 million ($2.8 million) of Boris Collardi’s deferred pay, the FT said, citing individuals familiar with the matter. Julius Baer is expected to withhold a similar amount for Bernhard Hodler, who previously served as the bank’s chief risk officer and interim CEO following Collardi’s departure in 2017, according to the news outlet.
The bank separately withheld some pay for the leadership of its Latin American business and compliance staff involved in the scandal, according to the report.
Switzerland’s Financial Market Supervisory Authority, or FINMA, penalized the bank in February for falling “significantly short” in its anti-money laundering duties between 2009 and 2018. The shortcomings led to the U.S. conviction in 2018 of a Panama-based Julius Baer banker for helping to launder $1.2 billion that had been embezzled from Venezuela’s state-owned Petróleos de Venezuela.
The Swiss bank is also in settlement talks with the U.S. Justice Department over its role in a money laundering and corruption case tied to football’s governing body FIFA.
Under the terms of FINMA’s enforcement action, Julius Baer is barred from making any significant acquisitions until the supervisory body deems it to be in compliance with AML rules. FINMA is separately weighing whether to initiate proceedings against individuals involved in the compliance lapses, including executives in supervisory roles, the Financial Times said.
Read more at the Financial Times
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