MBaer Merchant Bank: FINMA liquidation and the AML lesson

On 27 February 2026 FINMA's liquidation order against MBaer Merchant Bank AG took effect. The Zurich private bank, founded in 2018, lost its licence over sanctions and anti-money-laundering failures — a day after the US Treasury named it a primary money-laundering concern.

What happened

MBaer was licensed by FINMA in December 2018 and worked in private-client and transaction banking. By the end of 2025 it held roughly CHF 4.9 billion for close to 700 relationships, with more than 60 staff. FINMA opened enforcement in 2024 after examining client groups linked to Russian sanctions and to criminal proceedings.

What FINMA found

According to FINMA, the failures were systemic. At review, 80 per cent of business relationships carried heightened risk; among the most recent inflows, 98 per cent of incoming assets came from high-risk clients. FINMA documented that the bank repeatedly set aside its own compliance department's recommendations without justification, and pointed to:

• insufficient investigation of client backgrounds and the source of funds;
• reporting duties under Swiss AML law missed or met only after significant delay;
• transactions executed for sanctioned clients or clients with frozen assets;
• active assistance in circumventing official asset freezes.

FINMA called the breaches "extremely serious" and concluded the bank no longer met the standard of irreproachable business conduct a licence requires.

The US action and the outcome

On 26 February 2026 FinCEN barred US institutions from holding correspondent accounts for MBaer, citing transactions tied to illicit actors connected to Iran, Russia and Venezuela. With pressure from both jurisdictions, the board withdrew its appeal and resigned. FINMA appointed liquidators and opened proceedings against four individuals who may bear personal responsibility. The bank has said its assets are sufficient to satisfy clients and creditors in full, though payouts are restricted while it winds down.

What it means

This is one of the more significant recent Swiss banking enforcement actions, and it shows how closely Swiss and US regulators now coordinate on sanctions. The lesson for any supervised business is unglamorous: sanctions screening and AML controls have to work in practice, and the compliance function has to be independent enough that its recommendations are not quietly overruled. For institutions reviewing their own regulatory standing, the case is a useful, expensive checklist.