MAS imposes S$1.9 million penalty on Atrium Asia Investment Management, reprimands CEO

The Monetary Authority of Singapore (MAS) imposed a composition penalty of S$1.9 million on Atrium Asia Investment Management Pte Ltd (AAIM) following multiple breaches of anti-money laundering and countering the financing of terrorism (AML/CFT) requirements.

MAS announced the penalty on Tuesday (29 Oct), also issuing a formal reprimand to AAIM’s Chief Executive Officer, Mr Mintarja Oei, for failing to ensure AAIM’s compliance with these regulatory standards.

An MAS inspection revealed that AAIM’s internal procedures from June 2015 to October 2020 were significantly inadequate, resulting in violations that put the company at potential risk of exploitation for financial crimes.

According to MAS, AAIM did not have robust policies to detect suspicious transactions, particularly large transactions with third parties, which the firm processed without fully verifying the involved relationships.

MAS outlined four main areas where AAIM’s practices were found deficient. First, the firm failed to detect and report suspicious and unusually large customer transactions with third parties, taking inadequate steps to verify relationships between its customers and external entities. This lapse risked allowing illicit financial activity to proceed undetected.

Second, MAS highlighted AAIM’s failure to assess the risk profiles of its customers for money laundering (ML) and terrorism financing (TF) appropriately.

This included the firm’s shortcomings in addressing tax-related ML risk and implementing adequate procedures to identify and mitigate risks associated with its business relationships. Consequently, AAIM did not properly determine whether certain customer relationships required enhanced scrutiny, leaving the firm exposed to potential misuse.

Third, AAIM’s internal risk management system was found to be inadequate in identifying politically exposed persons (PEPs) among its customer base. PEPs, due to their public roles and access to significant resources, pose a higher risk of engaging in money laundering or financing terrorism, making it essential for financial institutions to apply enhanced due diligence.

AAIM, however, failed to implement this practice, resulting in several PEPs going unflagged and customer due diligence measures left incomplete.

Lastly, MAS noted that AAIM did not maintain proper documentation to meet AML/CFT requirements, as several customers’ beneficial ownership information was missing or outdated.

Beneficial ownership information is a key component in AML/CFT compliance, enabling institutions to identify the individuals behind transactions, which MAS requires for all regulated entities.

MAS attributed these compliance breaches directly to Mr Oei, who, as CEO, had a duty to oversee the firm’s adherence to MAS’s AML/CFT requirements.

MAS exercised its regulatory powers under section 334(1) of the Securities and Futures Act (SFA) 2001 to issue a reprimand to Mr Oei, stating that he failed to adequately ensure the firm’s compliance with AML/CFT standards.

MAS noted that since the inspection, AAIM has taken corrective measures to address the compliance gaps identified.

The recent penalty comes amid broader concerns from MAS over Singapore’s financial services sector, with the regulatory body warning that providers are “falling short” of their responsibilities to mitigate money-laundering risks.

MAS called for updates to risk management systems across the industry, urging financial institutions to implement more robust systems to avoid severe penalties or potential cancellations of licences.

In line with these concerns, Singapore’s central bank has earlier in the month, published recommendations from its Inter-Ministerial Committee, which reviewed the country’s anti-money-laundering framework.

These recommendations include stronger data-sharing measures across financial sectors, aimed at improving the detection of suspicious transactions. The proposed measures align with MAS’s call for financial institutions to “enhance their controls” to help mitigate the risks of money laundering and to cooperate with other industry players on joint anti-financial crime efforts.

These regulatory measures follow heightened scrutiny on Singapore’s AML framework, after the country was entangled in a major money-laundering scandal in 2023 that implicated several high-profile international banks, including DBS, Citi, and Credit Suisse, as well as multiple Chinese nationals who were later convicted.

The incident drew global attention and tarnished the financial hub’s reputation, driving MAS’s latest efforts to reinforce compliance within the sector.