The Swiss
Financial Market Supervisory Authority (FINMA) announced on Thursday that it
has opened bankruptcy proceedings against FlowBank SA, a Geneva-based online
brokerage and trading bank. The decision comes as the bank failed to maintain
the minimum capital required for its business operations and faces concerns of
potential over-indebtedness.
Swiss Regulator Initiates
Bankruptcy Proceedings Against FlowBank SA
FlowBank SA
has been under FINMA's scrutiny since October 2021, when the regulator
identified serious breaches of supervisory law, particularly concerning capital
requirements, organizational adequacy, and risk management. Despite the
imposition of wide-ranging measures and the appointment of an independent
auditor in October 2022, the bank continued to violate capital ratio
requirements and maintain deficiencies in various areas of its operations.
According to
FINMA, the primary objective of the bankruptcy proceedings is to protect
depositors. Current calculations suggest that privileged deposits, up to CHF
100,000 per client, can be repaid in full using the bank's available funds. The
regulator has appointed the law firm Walder Wyss AG as the liquidator to
oversee the bankruptcy process.
#FINMA eröffnet Konkurs über die FlowBank SA: https://t.co/DGxN8mzde5
Informationen zum Konkursverfahren stellt die FINMA auf ihrer Webseite zur Verfügung: https://t.co/S00N1ASeVo pic.twitter.com/NkCOi88mB3
— Eidgenössische Finanzmarktaufsicht FINMA (@FINMA_media) June 13, 2024
In June
2023, FINMA took further enforcement action against FlowBank SA, appointing a
monitor to oversee the bank's activities and investigate its compliance
failures. The monitor's report revealed repeated breaches of capital
requirements, inaccurate and incomplete bookkeeping and financial reporting,
and failure to fulfill disclosure and reporting obligations to the regulator.
“In
addition, the investigation found that the bank entered into numerous
higher-risk business relationships and processed large transactions without
properly investigating the background of these business relationships and
transactions,” FINMA stated in the press release.
FINMA views
this as a serious breach of the bank's money laundering
Money Laundering
Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund
Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund
Read this Term due diligence
obligations and a violation of the regulator's prohibition on the bank from
engaging in additional higher-risk business activities.
License Withdrawal and
Appeal
In light of
the bank's persistent malpractice and inability to rectify its non-compliance
Compliance
In finance, banking, investing, and insurance compliance refers to following the rules or orders set down by the government regulatory authority, either as providing a service or processing a transaction. Compliance concerning finance would also be a state of being following established guidelines or specifications. This designation can also encompass efforts to ensure that organizations are abiding by both industry regulations and government legislation. Understanding ComplianceCompliance is a
In finance, banking, investing, and insurance compliance refers to following the rules or orders set down by the government regulatory authority, either as providing a service or processing a transaction. Compliance concerning finance would also be a state of being following established guidelines or specifications. This designation can also encompass efforts to ensure that organizations are abiding by both industry regulations and government legislation. Understanding ComplianceCompliance is a
Read this Term
with licensing conditions, FINMA made the decision to revoke FlowBank SA's
banking license on March 8, 2024. The regulator also questioned the
bank's assurance of proper business conduct. Although the bank has appealed the
ruling to the Federal Administrative Court, FINMA has implemented various
preventivedecided measures that will remain in place throughout the appeal process
to safeguard against the unauthorized withdrawal of assets by the bank.
Upon
reviewing FlowBank SA's 2023 financial statements, which were recently approved
by the bank's board of directors, FINMA concluded that the bank's financial
health could have been more precarious than had been initially disclosed. The
regulator found that the bank had significantly violated minimum capital
requirements at the end of 2023 and again in April 2024. Moreover, there were
substantial grounds to believe that the bank was over-indebted as of April
2024.
With a
total asset base of roughly CHF 680 million, FlowBank SA maintains over 22,000
client accounts and has a global workforce of approximately 140 employees, with
subsidiary operations in London and the Bahamas. As the liquidation process
unfolds, the appointed liquidator will prioritize reimbursing privileged deposits to affected clients. Additionally, client custody accounts
will be separated from the bank's estate and returned to their rightful owners
in due course.
Earlier this year, FINMA announced the appointment of former ECB chief Stefan Walter as CEO, effective April 1, 2024. Last year, FINMA's previous CEO, Urban Angehrn, resigned from his position, citing health reasons.
The Swiss
Financial Market Supervisory Authority (FINMA) announced on Thursday that it
has opened bankruptcy proceedings against FlowBank SA, a Geneva-based online
brokerage and trading bank. The decision comes as the bank failed to maintain
the minimum capital required for its business operations and faces concerns of
potential over-indebtedness.
Swiss Regulator Initiates
Bankruptcy Proceedings Against FlowBank SA
FlowBank SA
has been under FINMA's scrutiny since October 2021, when the regulator
identified serious breaches of supervisory law, particularly concerning capital
requirements, organizational adequacy, and risk management. Despite the
imposition of wide-ranging measures and the appointment of an independent
auditor in October 2022, the bank continued to violate capital ratio
requirements and maintain deficiencies in various areas of its operations.
According to
FINMA, the primary objective of the bankruptcy proceedings is to protect
depositors. Current calculations suggest that privileged deposits, up to CHF
100,000 per client, can be repaid in full using the bank's available funds. The
regulator has appointed the law firm Walder Wyss AG as the liquidator to
oversee the bankruptcy process.
#FINMA eröffnet Konkurs über die FlowBank SA: https://t.co/DGxN8mzde5
Informationen zum Konkursverfahren stellt die FINMA auf ihrer Webseite zur Verfügung: https://t.co/S00N1ASeVo pic.twitter.com/NkCOi88mB3
— Eidgenössische Finanzmarktaufsicht FINMA (@FINMA_media) June 13, 2024
In June
2023, FINMA took further enforcement action against FlowBank SA, appointing a
monitor to oversee the bank's activities and investigate its compliance
failures. The monitor's report revealed repeated breaches of capital
requirements, inaccurate and incomplete bookkeeping and financial reporting,
and failure to fulfill disclosure and reporting obligations to the regulator.
“In
addition, the investigation found that the bank entered into numerous
higher-risk business relationships and processed large transactions without
properly investigating the background of these business relationships and
transactions,” FINMA stated in the press release.
FINMA views
this as a serious breach of the bank's money laundering
Money Laundering
Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund
Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund
Read this Term due diligence
obligations and a violation of the regulator's prohibition on the bank from
engaging in additional higher-risk business activities.
License Withdrawal and
Appeal
In light of
the bank's persistent malpractice and inability to rectify its non-compliance
Compliance
In finance, banking, investing, and insurance compliance refers to following the rules or orders set down by the government regulatory authority, either as providing a service or processing a transaction. Compliance concerning finance would also be a state of being following established guidelines or specifications. This designation can also encompass efforts to ensure that organizations are abiding by both industry regulations and government legislation. Understanding ComplianceCompliance is a
In finance, banking, investing, and insurance compliance refers to following the rules or orders set down by the government regulatory authority, either as providing a service or processing a transaction. Compliance concerning finance would also be a state of being following established guidelines or specifications. This designation can also encompass efforts to ensure that organizations are abiding by both industry regulations and government legislation. Understanding ComplianceCompliance is a
Read this Term
with licensing conditions, FINMA made the decision to revoke FlowBank SA's
banking license on March 8, 2024. The regulator also questioned the
bank's assurance of proper business conduct. Although the bank has appealed the
ruling to the Federal Administrative Court, FINMA has implemented various
preventivedecided measures that will remain in place throughout the appeal process
to safeguard against the unauthorized withdrawal of assets by the bank.
Upon
reviewing FlowBank SA's 2023 financial statements, which were recently approved
by the bank's board of directors, FINMA concluded that the bank's financial
health could have been more precarious than had been initially disclosed. The
regulator found that the bank had significantly violated minimum capital
requirements at the end of 2023 and again in April 2024. Moreover, there were
substantial grounds to believe that the bank was over-indebted as of April
2024.
With a
total asset base of roughly CHF 680 million, FlowBank SA maintains over 22,000
client accounts and has a global workforce of approximately 140 employees, with
subsidiary operations in London and the Bahamas. As the liquidation process
unfolds, the appointed liquidator will prioritize reimbursing privileged deposits to affected clients. Additionally, client custody accounts
will be separated from the bank's estate and returned to their rightful owners
in due course.
Earlier this year, FINMA announced the appointment of former ECB chief Stefan Walter as CEO, effective April 1, 2024. Last year, FINMA's previous CEO, Urban Angehrn, resigned from his position, citing health reasons.
