Bank Negara Malaysia (BNM) and the Labuan Financial Services Authority (LFSA) have imposed a total RM10 million compound on UBB Investment Bank Ltd for breaches of anti-money laundering and customer due diligence requirements.
UBB Investment Bank, a Labuan-licensed investment bank under UBB Amanah Group, was found to have committed several compliance failures during a joint on-site examination by BNM and LFSA in August 2024.
According to BNM, the examination uncovered material non-compliances, including delays in submitting suspicious transaction reports (STRs) and failures to properly conduct customer due diligence.
The bank failed to promptly file STRs for 53 suspicious transactions carried out between 2023 and 2024, breaching Section 14(1)(b) of the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (AMLA).
A separate LFSA investigation found that the bank had also failed to properly identify and verify a customer’s identity during the onboarding process in 2023. The breach, under Section 98(2) of the Labuan Financial Services and Securities Act 2010 (LFSSA), affected the bank’s ability to assess and detect potential links to illicit overseas activities.
The initial compounds were not paid within the required period, leading BNM and LFSA to begin prosecution proceedings against the bank for offences under AMLA and LFSSA.
UBB Investment Bank later submitted written representations to the Attorney General’s Chambers seeking reinstatement of the compounds.
With the written consent of the public prosecutor, BNM and LFSA imposed a RM9 million compound for the AMLA offences and RM1 million for the LFSSA offence on March 13, 2026.
The bank subsequently paid the full RM10 million on June 11, 2026, BNM said.
Following the enforcement action, BNM and LFSA reminded financial institutions and other reporting institutions to strengthen their internal controls and ensure full compliance with AMLA and related reporting requirements.
BNM warned that reporting institutions could be exploited by criminals through negligence or deliberate involvement, and that failures to meet their obligations could result in enforcement action, including prosecution.
