(Bloomberg) -- Financial authorities in Monaco reprimanded the local division of Swiss bank Julius Baer Group Ltd. for failing to maintain proper internal controls over £135 million ($174 million) in client transactions.
The Commission de Controle des Activities Financieres announced last week that Julius Baer bankers did not have appropriate measures in place for a series of 10 transactions by an unnamed client.
Even though each transaction was significant and included one for £30 million, they didn’t face the scrutiny they should have from “the company’s management or internal control departments,” authorities said.
The transactions should have been routed through the bank’s head office in Zurich and its records on the customer “appear contradictory or even inconsistent,” the regulator said.
Julus Baer had “fallen victim to the actions of one of its employees who had unknowingly circumvented the company’s rules and procedures,” according to the regulator’s statement and had filed a criminal complaint to Monaco prosecutors.
A spokesman for Julius Baer in Zurich declined to comment.
The public sanction, which was published in the principality’s newspaper of record, comes as Monaco looks to beef up its anti-money laundering systems after its addition last month to the so-called gray list of countries that struggle to stamp out financial crimes. A global watchdog group, the Financial Action Task Force, announced in late June that Monaco had “strategic deficiencies” in its program to investigate and prosecute white collar crimes.
Last week, a separate group of European examiners recommended sweeping reforms in the small city-state. The Group of Countries against Corruption said Monaco should adopt new rules that would prohibit conflicts of interest and enhance transparency by the palace, the legislature and the police.
Citing a Bloomberg investigation, the inspectors said Monaco should enact a rule that would formally remove Prince Albert II from state decisions in which he or his family have an interest.
--With assistance from Myriam Balezou.
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