MFSA coordinating with UK authorities as Pilatus passes under controllership

Bank whose chairman was arrested in the US over breach of sanctions against Iran, remains under controllership

The Malta Financial and Services Authority has placed the private bank Pilatus and under the controllership of Lawrence Connell, a former US financial regulator with experience in taking over the running of the Bank, to take charge of all assets and control of the bank’s banking and investment business.

The news follows the indictment in the United States of America of Pilatus chairman Ali Sadr Hasheminejad.

Since then the MFSA has removed Pilatus Bank’s former chairman from all his positions within the bank, stripping him of all voting rights as a shareholder, and taken charge of all assets including those related to the investment services business of the bank and directed the bank to obtain the MFSA’s approval prior to effecting any movement of the bank’s assets.

The MFSA also said it had stopped all transactions, including withdrawals or deposits.

The MFSA has insisted that at the time of the bank's authorisation process in late 2013, it carried out comprehensive due diligence and review of the application documents for many months, including the commissioning of an independent external intelligence report.

It also said had undertaken various supervisory steps, closely reviewing and monitoring the Bank, and subjecting it to numerous examinations on-site inspections regarding prudential issues, and on-site anti-money laundering examinations conducted jointly with the FIAU.

The MFSA said it will coordinate closely with international regulators, including the UK Financial Conduct Authority, law enforcement authorities and others.

"A comprehensive and in-depth compliance examination of the bank’s operations has been and continues to be underway. The MFSA will updated on progress with regards to this process within the parameters of the law."

Lawrence Connell has enjoyed a long career as a U.S. financial regulator at both state and federal levels, serving as national bank examiner with the Comptroller of the Currency, Connecticut Bank Commissioner and Securities Commissioner, and senior advisor to the U.S. Treasury Department.

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