Conviction of Former Swiss Banking Lobby Head

Pierre Mirabaud, who previously led Switzerland’s banking lobby, was found guilty of bribery and aggravated money laundering on Tuesday. The convictions were tied to SFr82.3 million (around $101.7 million) paid to a Kuwaiti official.

The Federal Criminal Court of Switzerland, located in Bellinzona, issued a two-year suspended prison term to Mirabaud. This was reported by the Financial Times. Mirabaud, a former senior partner of the Geneva private bank that bears his family’s name, made these payments to secure decisions to invest Kuwaiti state pension assets in his bank and its related funds.

During the hearing, the retired banker acknowledged his actions.

Mirabaud admitted in court that he had made “a very grave error of judgment” and mentioned that he had personally profited $1.8 million from this arrangement.

The court established that the payments were directed to Fahad Al-Rajaan, who was the former director-general of Kuwait’s Public Institution for Social Security. By late 2012, the Kuwaiti fund had about $595.3 million invested in these vehicles, according to the court’s findings. Moreover, Mirabaud faced charges related to over 122 transfers amounting to nearly SFr77 million, which prosecutors argued were intended to conceal the illegal origins of these payments.

Mirabaud held the presidency of the Swiss Bankers Association from 2003 to 2009, which placed him at the forefront of the country’s banking sector during part of the timeframe in question. He spent 30 years as a partner at the firm before transitioning to a consultancy role.

Prosecutors indicated that the payments spanned from 2000 to 2012. The charges detailed that Mirabaud, now 77, was aware of his actions.

According to the indictment, “He was aware of the risk associated with these payments and accepted the possible consequences should that risk materialize.”

In Switzerland, corruption and money laundering charges can result in up to five years in prison. Prosecutors recommended a 24-month sentence, taking into account Mirabaud’s advanced age, clean criminal record, and his cooperation throughout the process. The proceedings proceeded swiftly under a simplified procedure where he admitted the facts and accepted the proposed punishment. He was also ordered to pay SFr82,000 in costs and will be on probation for two years.

Al-Rajaan managed the Kuwaiti pension fund for nearly 30 years. He was later convicted of corruption and embezzlement in absentia and passed away in London in 2022. His estate is involved in a separate $1 billion civil lawsuit initiated by the pension fund in London’s High Court, with asset manager Man Group and Swiss bank EFG named as defendants. Both institutions maintain their innocence.

This conviction comes at a time when Swiss banking is striving to overcome years of scrutiny related to money laundering issues that have affected some of the sector’s most prominent institutions.