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The year 1986 did not bode well for investment banker Dennis Levine. In a civil injunctive action the US Securities and Exchange Commission (SEC or the Commission) alleged…
The year 1986 did not bode well for investment banker Dennis Levine. In a civil injunctive action the US Securities and Exchange Commission (SEC or the Commission) alleged that Levine, through an insider dealing scheme, violated several anti‐fraud provisions of the Securities Exchange Act of 1934. Without admitting or denying that he obtained over $12m in illicit profits from secretly trading in the securities of 54 companies, Levine settled the SEC action and was ordered to disgorge over $10m to the court.
This case study highlights why and how the Swiss banking sector played a crucial role in the 1Malaysia Development Berhad (1MDB) corruption scandal. In particular, the…
This case study highlights why and how the Swiss banking sector played a crucial role in the 1Malaysia Development Berhad (1MDB) corruption scandal. In particular, the paper illustrates how different actors in the Swiss financial sector neglected compliance guidelines and due diligence, thus effectively facilitating the laundering of misappropriated 1MDB funds. The purpose of this paper is to give bankers and compliance officers an overview of the methods money launderers use to circumvent compliance measures so that the Swiss banking sector can be protected more effectively from abuse. In addition, there is discussion whether current regulations, including banking secrecy, should be amended.
This paper used a content analysis methodological approach to collect data from media sources. Qualitative methods were used to analyze these sources.
The findings reveal that the Swiss banking sector played a major role in facilitating the siphoning and subsequent laundering of 1MDB funds by neglecting due diligence obligations.
This paper advocates a more consequential implementation of the existing anti-money laundering and corruption regulations.
A reworking of the 1MDB scandal should be of interest to compliance professionals in the banking sector and citizens that have been negatively affected or are concerned by the involved high-level corruption.
This paper is the first of its kind to study the role of the Swiss banking sector in the 1MDB scandal.
The aim of the paper is to examine the various aspects of the 1MDB scandal including the extent and types of corruption that occurred and the action taken to deal with…
The aim of the paper is to examine the various aspects of the 1MDB scandal including the extent and types of corruption that occurred and the action taken to deal with them. In doing this, the paper seeks to identify the reasons for the scandal and the lessons that can be learnt to avoid such a scandal in Malaysia and elsewhere in the future.
The research for the paper is based on evidence from court hearings, reports of watchdog and regulatory agencies, media reports, and various articles and books written about 1MDB.
The paper shows that most of the scandal involved embezzlement, bribery, false declarations and bond mispricing relating to extensive borrowing by 1MDB, and entailed a global network of shell companies and individuals through which the illicit money was passed. It also shows weak governance in 1MDB, poor internal controls within banks, the failure of watchdog and enforcement bodies to take the necessary action partly due to political control over them, and overall the lack of political will to deal with the scandal.
The paper builds on the findings of other papers and books written on the 1MDB scandal. It does this by linking the corruption to the borrowings of 1MDB, the international network of money-laundering and bribery through which illicit money flowed, and the poor internal controls in the organisation. It also builds on previous research by highlighting the failure of banks to identify money-laundering and of watchdog and enforcement bodies to deal with the corruption. A further value of the paper is to identify the lessons that can be learnt about combatting corruption on such a scale.