Swiss Banking Chief Convicted for $101M Bribery Scheme

Pierre Mirabaud, the former head of Switzerland’s banking lobby, was convicted Tuesday of bribery and aggravated money laundering involving SFr82.3mn ($101.7mn) in payments to a Kuwaiti official. The Federal Criminal Court in Bellinzona handed Mirabaud a two-year suspended prison sentence, as reported by the Financial Times. Mirabaud, who was a senior partner at the Geneva private bank that bears his family name, made these payments in exchange for favorable decisions regarding the placement of Kuwaiti state pension assets with the bank and its investment funds.

During the court hearing, Mirabaud admitted to the facts of the case, acknowledging he had made a “very grave error of judgment.” He stated that he personally earned $1.8mn from the arrangement. The payments were directed to Fahad Al-Rajaan, the former director-general of Kuwait’s Public Institution for Social Security. By late 2012, the Kuwaiti fund had $595.3mn invested in vehicles managed by Mirabaud's bank.

The court also found that Mirabaud was involved in over 122 transfers, totaling almost SFr77mn, which prosecutors argued were intended to obscure the criminal origins of the payments. Mirabaud, who served as president of the Swiss Bankers Association from 2003 to 2009, was in a position of significant influence during the time the payments were made. He has described himself as a longtime hedge fund investor, having maintained relationships with notable figures such as George Soros and Paul Tudor Jones.

Prosecutors indicated that the payments occurred between 2000 and 2012. The indictment described Mirabaud, now 77, as fully aware of the risks associated with these payments and accepting the potential consequences. Corruption and money laundering in Switzerland can lead to sentences of up to five years in prison. Prosecutors sought a 24-month sentence, taking into account Mirabaud’s age, lack of prior convictions, and his cooperation during the proceedings.

Court's Simplified Sentencing Process Explained

The court proceedings were conducted under a simplified procedure, where the defendant accepts the facts and a proposed sentence is presented to the court. In addition to his suspended sentence, Mirabaud was ordered to pay SFr82,000 in costs and will be on probation for two years.

The Part Nobody Mentioned

Fahad Al-Rajaan, who managed the Kuwaiti pension fund for nearly three decades, was later convicted of corruption and embezzlement in absentia. He passed away in London in 2022. His estate is involved in a separate $1bn civil case brought by the pension fund at London’s High Court, which also names asset manager Man Group and Swiss bank EFG, both of which deny any wrongdoing.

This conviction comes at a time when Swiss banking is striving to improve its reputation amidst ongoing scrutiny over money laundering practices that have plagued many of the sector’s most prominent institutions.