Swiss financial regulator orders Leonteq to return 9.3 million Swiss francs in profits for breaching risk management obligations. The decision comes after a thorough investigation into the investment services firm’s practices, which found that it had failed to comply with its risk management obligations.
The Swiss Financial Market Supervisory Authority (FINMA) has ordered Leonteq to disgorge profits worth 9.3 million Swiss francs ($10.52 million) as a result of its non-compliance with risk management regulations. This decision follows a probe launched by FINMA in 2018, which revealed that Leonteq had failed to adequately manage risks in its investment services.
According to FINMA, Leonteq’s risk management deficiencies were primarily related to its structured products business. The firm had not implemented appropriate risk controls and monitoring mechanisms, which led to significant losses for clients. FINMA also found that Leonteq had not properly assessed the risks associated with its business activities and had not taken sufficient measures to mitigate them.
As a result of these findings, FINMA has ordered Leonteq to disgorge profits worth 9.3 million Swiss francs, which the firm had generated through its non-compliant practices. This amount represents the profits that Leonteq had earned from its structured products business between 2014 and 2018.
The decision by FINMA to order Leonteq to return its profits highlights the importance of risk management in the financial industry. It serves as a reminder to all financial institutions to comply with their risk management obligations and to implement appropriate controls and measures to mitigate potential risks.
The impact of this news on Leonteq’s reputation and financial standing remains to be seen. However, it is likely that the firm will face increased scrutiny from regulators and investors in the future. This case also serves as a warning to other financial institutions to ensure that they are in compliance with risk management regulations to avoid similar consequences.