In a significant legal development, Switzerland’s Attorney General’s office has imposed a $1 million fine on Morgan Stanley’s Swiss operations following a failure to prevent a money laundering scheme dating back to 2010.
This penalty stems from the actions of a client advisor who, according to Swiss authorities, did not take adequate measures to halt the laundering of funds derived from bribery activities in Greece.
The case revolves around the late Greek Defence Minister, Akis Tsohatzopoulos, who was convicted of money laundering by a Greek court in 2013. Tsohatzopoulos had used his Swiss bank accounts, under the guise of a straw man and his cousin, to launder bribe money originating from corrupt activities in Greece.
The funds in question flowed through Bank Morgan Stanley (Switzerland) AG at the time, which failed to identify or prevent the illicit transactions. This breach led to a thorough investigation by Swiss authorities, culminating in the fine imposed on Morgan Stanley (Switzerland) GmbH.
Although Morgan Stanley cooperated fully with the investigation, the costs of the legal proceedings were also passed on to the firm. Additionally, the company has opted to forgo its right to challenge the fine, signaling a willingness to move past the legal fallout from the 2010 scandal.
This penalty underscores the Swiss legal system’s commitment to cracking down on financial crimes, especially when high-profile international figures are involved. It also serves as a reminder of the heightened scrutiny financial institutions face in ensuring rigorous anti-money laundering practices are in place.
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