Dutch prosecutors to investigate UBS chief over ING money laundering case

A Dutch court on Wednesday ordered a criminal investigation into the role UBS Chief Executive Ralph Hamers played in ING Group’s failure to crack down on money laundering when he was head of the Dutch bank.

The investigation comes only a month after Hamers became head of UBS, the world’s largest wealth manager, at a time when it is trying to move on from a legacy of costly court cases over money laundering and tax evasion.

The Swiss bank said Hamers would stay in his role while prosecutors conducted their investigation and that extensive due diligence, including an independent assessment of the Dutch anti-money laundering issues, had been conducted before he was hired.

“I have full confidence in Ralph’s ability to lead our firm,” UBS Chairman Axel Weber said. “We were fully satisfied with the results of these independent evaluations and the assessment of the Dutch prosecutor at the time.”

UBS has contingency plans for another executive to deputise for Hamers should he be called for an extended period of questioning, a source familiar with the matter said.

It was not immediately clear how long the Dutch investigation would last though one source said they did not expect a resolution until 2022 at the earliest.

The Swiss banking industry is trying to rebrand itself as a stable and trustworthy financial centre after global pressure effectively brought an end to a centuries-long policy of banking secrecy, but the investigation into Hamers, as well as the departure of Credit Suisse’s chief executive this year over a spying scandal, risk tarnishing its efforts.

Swiss financial market supervisor FINMA said it also addressed the Dutch anti-money laundering issues in its review of Hamers’ nomination and confirmed that he was “fit and proper” to take on the role.

UBS shares largely shrugged off the investigation news to trade 0.4% higher on Wednesday afternoon, slightly underperforming a 1.4% rise in Europe’s STOXX bank index.

BOLD CHOICE

ING agreed with Dutch prosecutors in 2018 to pay 775 million euros ($940 million) to settle a case over failing to spot money laundering and other criminal activities by its clients.

Hamers ran ING, the largest bank in the Netherlands, from 2013 until June this year, when he left to join UBS.

Some investors were unhappy with the 2018 decision because it failed to hold any individuals responsible.

https://www.reuters.com/article/us-ubs-ceo-probe-investigation-idUSKBN28J0VQ