UBB Investment Bank Paid RM10 Million Fine by Bank Negara and LFSA for Regulatory Oversights

KUALA LUMPUR, Aug 15 — Bank Negara Malaysia (BNM) and the Labuan Financial Services Authority (LFSA) have imposed a combined RM10 million compound on UBB Investment Bank Limited (UBBIB) for regulatory reporting oversight and customer onboarding requirements.

Joint regulatory examinations identified material non-compliances by the investment bank, including failures to promptly submit suspicious transaction reports (STRs) and critical shortcomings in its customer onboarding procedures.

Investigations conducted by BNM and LFSA established that UBBIB failed to promptly report 53 suspicious transactions executed between 2023 and 2024. The reporting failure contravened Section 14(1)(b) of the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (AMLA).

In a separate investigation, LFSA found that UBBIB failed in 2023 to properly identify and verify a customer’s identity during the onboarding process. Regulators confirmed that the onboarding lapse constituted an offence under Section 98(2) of the Labuan Financial Services and Securities Act 2010 (LFSSA).

Following the initial detection of the breaches, BNM and LFSA offered compounds to UBBIB. However, because the bank did not settle the penalties within the stipulated timeframe, formal prosecution was instituted against the institution under both AMLA and LFSSA provisions.

UBBIB then submitted written representations to the Attorney General’s Chambers seeking the reinstatement of the compound offers.

With the written consent of the Public Prosecutor, BNM and LFSA subsequently issued a RM9 million compound for offences under AMLA and an additional RM1 million compound for the LFSSA breach on March 13, 2026.

UBBIB fully paid the combined RM10 million compound on June 11, 2026. Internal measures are being taken to ensure such problems do not occur in the future.

UBB Amanah Berhad is also understood to have taken measures to audit their processes. The group of companies have continued operations without any reports of payment defaults since the investigation commenced in 2023.

-NMT