MBaer Merchant Bank Liquidated by FINMA: What Happened and What It Means for Swiss Banking

On 27 February 2026, the Swiss Financial Market Supervisory Authority (FINMA) announced that its liquidation order against MBaer Merchant Bank AG is now in effect. The Zurich-based private bank lost its banking licence after FINMA uncovered systematic failures in anti-money laundering (AML) compliance, risk management, and organisational controls. A day earlier, the U.S. Treasury's FinCEN designated MBaer a "primary money laundering concern" under Section 311 of the USA PATRIOT Act.

Background: From Banking Licence to Enforcement

MBaer Merchant Bank was founded in 2018 by Michael Bär, a descendant of the Bär banking family behind Julius Bär. The bank received its FINMA licence in December 2018 and operated in the private client and transaction banking segments from its offices in central Zurich. By the end of 2025, MBaer held approximately CHF 4.9 billion in client assets, maintained nearly 700 client relationships, and employed over 60 people.

In 2024, FINMA opened enforcement proceedings after conducting investigations into MBaer's client groups with links to Russian sanctions and related criminal proceedings. The regulator appointed an investigating agent to examine the bank's operations in detail.

FINMA's Findings: Systematic Compliance Failures

The investigation revealed an alarming picture. According to FINMA, 80% of the bank's business relationships at that time carried increased risks, and most recently, 98% of incoming assets originated from high-risk clients. The investigating agent found that MBaer repeatedly disregarded the recommendations of its own compliance department when dealing with these high-risk business relationships, without providing comprehensible justification.
Specifically, FINMA found that MBaer:

Systematically failed to investigate the backgrounds of business relationships and transactions adequately;
Did not fulfil its reporting obligations under Swiss anti-money laundering legislation (AMLA), or did so only after considerable delay;
Executed transactions on behalf of clients who appeared on international sanctions lists or whose funds had been frozen by Swiss criminal authorities;
In several cases, actively assisted clients in circumventing official asset freezes.

FINMA characterised the case as "extremely serious," concluding that MBaer no longer met the licensing requirements regarding irreproachable business conduct and organisational standards.

U.S. Treasury Intervention: FinCEN Designation

On 26 February 2026 — one day before FINMA's public announcement — the U.S. Treasury Department's FinCEN proposed a rule under Section 311 of the USA PATRIOT Act that would prohibit American financial institutions from maintaining correspondent accounts for MBaer. FinCEN designated MBaer as a financial institution of "primary money laundering concern," citing its role in facilitating transactions linked to illicit actors connected to Iran, Russia, and Venezuela.

The combined pressure from both Swiss and U.S. regulators led MBaer's board of directors to withdraw its appeal before the Swiss Federal Administrative Court, making FINMA's liquidation order legally enforceable. The board subsequently resigned. FINMA appointed Prof. Daniel Staehelin and Dr. Lukas Bopp of Kellerhals Carrard Basel as liquidators.

FINMA has also opened proceedings against four unnamed individuals who may bear personal responsibility for the supervisory violations.

Current Status for Clients

MBaer stated that sufficient assets exist to satisfy all clients and creditors in full. However, due to the U.S. intervention and the revocation of its licence, the bank is currently subject to significant transaction restrictions: payments can only be made in Swiss francs and are limited to CHF 100,000 per client. Clients may continue to contact their relationship managers. Annett Viehweg continues as CEO under the supervision of the appointed liquidators.

Implications for the Swiss Financial Centre

The MBaer case is one of the most significant Swiss banking enforcement actions in recent years. It highlights the growing coordination between Swiss and U.S. regulators on sanctions enforcement and AML compliance. For companies operating in or through Switzerland, the case underscores the importance of robust compliance frameworks, effective sanctions screening, and genuine independence of compliance functions within financial institutions.

Sources

This article is published for informational purposes by Goldblum & Partners AG, a Zurich and Zug-based law firm specialising in Swiss corporate law, company formation, and regulatory compliance. If you have questions about Swiss banking regulation or compliance requirements, contact us.