Swiss private bank Julius Baer has been fined over €4.3 million by Switzerland’s financial regulator, FINMA, after a scathing report exposed a decade of severe anti-money laundering (AML) lapses. The failures, which spanned from 2009 to 2019, revealed systemic weaknesses in the bank’s compliance practices and its continued relationship with high-risk clients, despite glaring red flags.
Major Findings from the Investigation
FINMA’s investigation uncovered serious shortcomings in Julius Baer’s internal controls and due diligence procedures. The regulator found that the bank repeatedly ignored warning signs linked to certain clients—most notably a Russian banker involved in legal controversies and a group of Indian nationals serviced through its Dubai, Zurich, and Singapore branches.
Among the most alarming issues was the bank’s failure to investigate suspicious sources of wealth or justify the purpose behind unusually large transactions. In many cases, documentation was incomplete, ambiguous, or entirely missing. This lack of proper due diligence directly violated Swiss financial regulations aimed at preventing money laundering.
Flawed Culture and Incentives
FINMA highlighted deeper issues rooted in the bank’s internal culture. According to the regulator, Julius Baer had a business model where financial performance was often prioritized over compliance. Client advisors received generous bonuses tied to revenue—sometimes even when they were handling accounts that should have raised compliance concerns. This incentivized risk-taking and discouraged scrutiny of clients flagged for potential AML violations.
Sanctions and Mandatory Reforms
In response to these findings, FINMA has imposed a number of penalties and corrective measures:
- Julius Baer must return CHF 3 million in unlawfully earned profits and pay CHF 1.3 million in administrative costs.
- The bank is required to establish a dedicated board committee focused on compliance oversight.
- It must revise its remuneration and disciplinary frameworks to discourage misconduct and strengthen accountability.
- A more robust system for identifying and reviewing high-risk client relationships must be implemented across all branches.
- FINMA has appointed an independent auditor to monitor the bank’s progress and ensure compliance with the mandated reforms.
A Troubled History
This is not the first time Julius Baer has come under regulatory scrutiny. In 2020, the bank was sanctioned for AML failings related to the Venezuelan oil firm PDVSA and the FIFA corruption scandal. As part of those sanctions, FINMA temporarily barred the bank from acquiring new businesses. In 2021, Julius Baer also agreed to pay over $79 million to U.S. authorities to settle charges connected to laundering bribes in the FIFA case.
Leadership Overhaul and Future Outlook
In an effort to turn the page, Julius Baer recently overhauled its leadership team. Stefan Bollinger, formerly with Goldman Sachs, took over as CEO in early 2025. Meanwhile, Noel Quinn, the former CEO of HSBC, was appointed chairman of the board. These leadership changes are part of a broader strategy to rebuild trust and improve the bank’s risk management culture.
Though the bank has not commented publicly on FINMA’s latest action, this enforcement serves as a powerful reminder: even prestigious institutions are not above the law, and regulators are intensifying their scrutiny of banks that fail to uphold rigorous AML standards.
