MAS clamps down hard on money laundering and financial services breaches, according to latest Enforcement Report

Money laundering, market abuse, and financial services misconduct were the three key areas of targeted by the Monetary Authority of Singapore (MAS) in its probe against breaches of the Authority’s regulations, as revealed in its latest Enforcement Report on Tue (19 Mar).

The report revealed that among the measures taken by MAS between 1 July 2017 to 31 December 2018 were:

  • The sentencing of one individual to 16 weeks’ imprisonment for false trading;
  • The imposition of financial penalties and compositions worth S$16.8 million across 42 financial institutions; and
  • The imposition of S$698,000 worth in civil penalties in relation to two insider trading cases and one unauthorised trading case.

In the Enhancement Report, the Authority had also mentioned the average time it requires to conduct its reviews and investigations, which typically ranges from 3 months to 33 months.

Average time taken for MAS’ reviews and investigations in relation to financial breaches from 1 Jul 2017 to 31 Dec 2018. Source: MAS

Financial breaches related to the 1Malaysia Development Berhad (1MDB) graft scandal such as money laundering were also subject to MAS’ enforcement actions during the aforementioned period, including shutting down banks, imposing financial penalties against financial institutions failing to meet the expected anti-money laundering standards, and banning errant individuals from Singapore’s financial industry.

MAS noted that its review of the case is its most comprehensive anti-money laundering and countering the financing of terrorism review to date, adding that it has worked closely with the Attorney-General’s Chambers (AGC), Commercial Affairs Department (CAD), as well as foreign regulatory and law enforcement agencies to uncover a complex web of transactions involving numerous offshore shell companies and conspirators operating in multiple jurisdictions.

The Authority also revealed that there are ongoing investigations into other financial institutions and individuals suspected of being involved in the 1MDB-related offences.

Prohibition orders against individuals suspected to be involved in the 1MDB-related financial breaches. Source: MAS

In order to strengthen its protection to consumers and safeguard public trust in financial institutions, MAS said that it will put in place several measures such as the following:

  • Timely and adequate disclosure of corporate information by listed companies;
  • Business conduct of financial advisers and their representatives;
  • Financial institutions’ compliance with Anti-Money Laundering(AML) / Combatting the Financing of Terrorism (CFT) requirements;
  • Brokerage houses’ internal controls to detect and deter market abuse; and
  • Surveillance and investigations into suspected insider trading.

Channel NewsAsia reported that MAS has also utilised data analytics and augmented intelligence for the purposes of increasing the precision of its AML/CFT monitoring and detecting market manipulation respectively under Project Apollo, an intelligence tool devised by the Authority to assist enforcement officers in sorting out cases according to importance.

A MAS spokesperson told CNA: “After Apollo was developed, we tested it using past cases where investigations had been completed and market manipulation was found to have occurred.”

MAS’ priorities for the year 2019/2020 in relation to its enforcement against financial breaches according to its rules and regulations. Source: MAS

Executive Director (Enforcement) of MAS Gillian Tan said: “As Singapore’s financial industry grows in size and complexity, so will the risks of financial misconduct.

“Enforcement plays a critical role in financial supervision through the detection, investigation and punishment of serious misconduct.

“This is intended to deter illegal and unethical behaviour and protect consumers,” she said.

Ms Tan added: “Building on last year’s Enforcement Monograph, the Enforcement Report provides detailed insights into MAS’ enforcement work and priorities, and provides the public and financial sector with a comprehensive picture of our ongoing efforts to preserve the integrity of Singapore’s financial markets.”

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March 2019