MBAER Merchant Bank: bank is now in liquidation

MBAER Merchant Bank: bank is now in liquidation

MBaer Merchant Bank: Bank Enters Liquidation Following Regulatory Enforcement

Swiss financial regulator FINMA confirmed on February 27, 2026, that the liquidation order for Zurich-based MBaer Merchant Bank AG is now effective, following the bank's withdrawal of its appeal to the Swiss Federal Administrative Court. The decision concludes enforcement proceedings initiated by FINMA in 2024, which revealed systemic failures in the bank's anti-money laundering (AML) controls and risk management.

FINMA found that MBaer enabled clients to circumvent sanctions against Iran, Russia, and Venezuela by facilitating transactions that violated asset freezes. Investigations showed that 80% of the bank's business relationships involved high-risk clients, with 98% of assets received in recent periods originating from such clients. The bank also ignored compliance recommendations and failed to meet AML reporting obligations, in some cases executing transactions for clients on sanction lists.

The U.S. Financial Crimes Enforcement Network (FinCEN) had previously flagged MBaer as a "primary money laundering concern" under Section 311 of the USA PATRIOT Act, proposing measures to restrict its access to the U.S. financial system. This added urgency to FINMA's enforcement actions, as the bank faced dual regulatory pressures from Swiss and U.S. authorities.

FINMA emphasized that MBaer's conduct exposed the Swiss financial sector to "disproportionately high risks" due to inadequate organizational structures and governance. The regulator appointed Prof. Daniel Staehelin and Dr. Lukas Bopp of Kellerhals Carrard KIG Basel as liquidators to oversee the wind-down of the bank's operations. At year-end 2025, MBaer managed CHF 4.9 billion in client assets across 700 relationships, employing over 60 staff.

Separately, FINMA has opened proceedings against four individuals potentially responsible for regulatory breaches. The case underscores heightened global scrutiny of banks facilitating sanctions evasion, with regulators prioritizing enforcement to uphold financial integrity.

This development highlights the critical role of robust compliance frameworks in maintaining trust in financial systems, particularly for institutions operating in cross-border markets.