Singapore’s central bank has fined Standard Chartered Bank and Coutts for anti-money laundering breaches related to 1MDB and also plans to bar one prominent former Goldman Sachs banker from working in Singapore’s securities industry for 10 years owing to his involvement in the scandal surrounding the Malaysian state investment fund.

The Monetary Authority of Singapore said in a statement this morning it has fined the Singapore branches of;

• Standard Chartered Bank (SCB) S$5.2m ($3.65m) and
• Coutts S$2.4m, ely.

StanChart was inspected by the MAS about 1MDB-related fund flows that took place from 2010 to 2013.

The central bank said it found “significant lapses” in the lender’s customer due diligence measures and controls for ongoing monitoring, which resulted in some breaches of the MAS’s anti-money laundering regulations.

MAS said the lapses;

• “stemmed from inadequacies in policies and procedures, insufficient independent oversight of front office staff, and a lack of awareness of money laundering risks among some bank staff”, but it said its inspection
• “did not find pervasive control weaknesses or wilful misconduct at SCB.”

MAS’s examination of Coutts revealed breaches of the anti-money laundering regulations related to customer due diligence measures for politically-exposed persons (PEPs), with a failure to exercise “necessary enhanced due diligence” on accounts set up between 2003 and 2009 for these PEPs.

Tim Leissner AND Goldman Sach

The Singaporean central bank has also served notice of its intent to issue a prohibition order against Tim Leissner, Goldman Sach’s former chairman of Southeast Asia, for making false statements on behalf of the investment bank.

Mr Leissner had overall responsibility for managing the relationship with 1MDB when the investment bank had been engaged by the Malaysian fund to arrange three bond sales from 2012 to 2013.

Mr Leissner left Goldman in February after it emerged that he had written a reference letter for Jho Low, the Malaysian businessman linked by US prosecutors to the 1MDB scandal, which contained “inaccurate and unauthorised statements,” according to a Goldman regulatory filing.

The MAS’s proposed order will prohibit Mr Leissner “for 10 years from:

• performing any regulated activity under the Securities Future Act; or
• taking part, directly or indirectly, in the management of any capital market services firm in Singapore.”

Marc S. Harris, Los Angeles-based lawyer for Mr Leissner, said that his client had been invited by MAS to respond to the allegations against him and looked forward to doing so.

The lawyer’s statement said:

• Prior to today, Mr. Leissner had not heard of any contemplated regulatory action by the MAS and had not been contacted by the MAS or given any opportunity to respond to the MAS regarding the allegations raised.

The lawyer noted that no order or sanctions have been imposed on Mr Leissner by any regulatory authority.

MAS said in the statement that it had “served notice of its intention to issue a prohibition order” against Mr Leissner.

Ravi Menon, the MAS’s managing director, said the central bank’s tough actions for lapses on anti-monetary laundering controls;

• “send a strong signal that we will not tolerate the abuse of Singapore’s financial system for illicit purposes.”

He continued:

• The supervisory investigations into the intricate web of international fund flows has been a learning experience for financial institutions as well as for MAS. Our financial sector will emerge cleaner and stronger from the lessons learnt.

Mr Low has previously denied wrongdoing.

1MDB has denied any wrongdoing.

IT SHOULD ALSO BE NOTED Goldman is not accused of any wrongdoing in the MAS statement, issued on Friday morning, but Singapore authorities indicated that there is intensifying global regulatory scrutiny of the bank’s role in the 1MDB affair.