US authorities had classified the Zurich-based private bank MBaer as a “primary money laundering risk”.
Keystone / Gaetan Bally
Michael Bär has long said banking is in his genes. A great-grandson of Julius Baer’s founder, he grew up during the heyday of Swiss private banking, when secrecy and security drew in the world’s wealthy – including those with nefarious motives for avoiding scrutiny.
The business he launched in 2018 was pitched as an alternative to the sector’s old guard, which had retreated from riskier business and tightened controls in the face of a US crackdown on tax evasion and sanctions breaches.
Less than a decade later MBaer Merchant Bank is in liquidation, its fate sealed by the US Treasury’s February invocation of “Section 311”, a power allowing banks deemed a “primary money laundering concern” to be cut off from the American financial system.
“Section 311 is not used a lot but when it is, it is the kiss of death,” said Tom Keatinge, director of the Centre for Financial Crime and Security at the Royal United Services Institute.
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While MBaer described itself as “the bank with a soul”, run “by entrepreneurs for entrepreneurs”, Washington says it was a conduit for funds tied to some of the economies most heavily hit by sanctions.
US Treasury secretary Scott Bessent in February said: “MBaer has funnelled over a hundred million dollars through the US financial system on behalf of illicit actors tied to Iran and Russia.”
‘It was well known’
The bank’s downfall cuts against Switzerland’s more than decade-long campaign to clean up its financial sector after the scandals of the banking-secrecy era.
Critics say it also raises questions about whether Swiss authorities moved quickly enough given the scale of risks that later emerged.
Switzerland’s financial regulator Finma had issued a liquidation order against MBaer after a lengthy investigation. But the bank was able to contest the decision in court and it ultimately took US pressure to force it out of business.
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“Everyone knows what’s going on and yet it continues for far too long,” said one Zurich-based banking executive. “It was well known what the bank’s strategy was.”
Serving riskier individuals
MBaer was part of a new generation of smaller, more flexible banks that emerged after Washington’s clampdown on financial crime forced Switzerland to dismantle parts of its secrecy regime.
Big banks had paid billions in fines, handed over client data and tightened compliance. Institutions including UBS, Credit Suisse, Pictet and Julius Baer pulled back from risk, cutting ties with clients in sanctions-hit countries or with complex cross-border structures. Corporate banking shrank.
MBaer set out to serve riskier individuals but with stricter due diligence — a challenge to an industry Bär thought had become slow, cautious and overly bureaucratic, according to people familiar with his thinking.
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“There were people from jurisdictions other banks wouldn’t touch even if the money was clean,” said one person who knows him. “He wanted to reach those people.”
Bär also drew on his network from Switzerland’s private banking world, including former colleagues from Julius Baer where he worked early in his career, to build MBaer’s early team. At its height it had about 1,000 clients.
But according to the US Treasury’s Financial Crimes Enforcement Network, MBaer was a “critical access node to the US dollar . . . for a wide variety of illicit actors”.
In its report released alongside the Section 311 order, FinCen set out its case through examples spanning three of the world’s most sensitive sanctions theatres.
Russia formed one strand. FinCen said MBaer maintained accounts and handled payments linked to Russians under US sanctions including former president Dmitry Medvedev, facilitated money laundering by oligarchs and “politically exposed people”, and processed transactions linked to military procurement.
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Venezuela, where FinCen focused on alleged corruption and sanctions-evasion schemes tied to state oil company PDVSA, formed another axis.
The filing also detailed an Iran-related network tied to the Islamic Revolutionary Guard Corps, classified by the US as a foreign terrorist organisation, alleging MBaer facilitated transactions connected to an oil-smuggling and money-laundering scheme.
‘We are not the bank for oligarchs’
Investigators described a consistent pattern: networks operating in sanctioned sectors using layered corporate structures, intermediaries and cross-border transactions – and relying on banks willing to process them.
MBaer recruited senior personnel with experience of clients from the three countries.
FinCen said the bank’s beginnings were “anchored in Venezuela corruption”, citing reports that Siri Evjemo-Nysveen, who sat on its board from 2019 to 2023, had facilitated PDVSA-linked payments on behalf of her husband, Italian trader Alessandro Bazzoni.
He was hit with US sanctions in the last days of Donald Trump’s first term as president for his alleged role in a Venezuelan oil-trading network but they were later revoked during Joe Biden’s presidency.
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Lawyers for Evjemo-Nysveen and Bazzoni said the FinCen report referred to “unsubstantiated or debunked sources”.
They added: “US (and Swiss) authorities have never taken any action, investigative or otherwise, against Ms Evjemo-Nysveen in the context of the allegations referred to” in what they described as “discredited” reporting.
FinCen alleges MBaer bankers continued to bring in high-risk clients even after internal compliance teams raised concerns, and that some transactions were processed despite red flags or incomplete due diligence checks.
Some legal experts have described the FinCen report as “thin”, noting its reliance on blog posts and other public reporting.
“You could argue that a lot of evidence is circumstantial – based on patterns of activity, intelligence assessments and links rather than a series of clearly established sanctions violations,” said one Zurich-based lawyer.
Others say the question of whether Swiss authorities moved quickly or forcefully enough is more relevant.
Even before any regulatory inquiries formally began, rumours had swirled in Swiss banking circles over MBaer’s clients – especially those from Russia.
As scrutiny mounted, Bär remained defiant. “We are not the bank for oligarchs,” he insisted in a public statement. “We have a fairly broad base.”
‘An embarrassment’
Finma looked into MBaer for two years before deciding to revoke its licence. But even then, Swiss law allowed the bank to continue operating pending the results of an appeal.
It took Washington’s Section 311 intervention – deployed against a Swiss bank for the first time – to bring MBaer down.
Mark Pieth, a legal professor formerly at the University of Basel whose law firm specialises in white-collar crime and Swiss criminal law, said the case’s handling in Switzerland was an “embarrassment”.
“Finma has a legacy of being slow and that is a problem,” Pieth said. “They are not yet where they should be . . . whereas FinCen acted brutally and quickly.”
The Swiss regulator began examining MBaer in 2023 and opened formal enforcement proceedings the following year. Investigators undertook a deep review, examining millions of emails, transaction records and client account files over roughly a year.
Bär stepped down as chief executive in early 2025 so he could focus more on client relationships and was replaced by Annett Viehweg, a former Deutsche Bank executive who joined MBaer in 2023 and had previously run the Swiss arm of Russian state lender Sberbank.
Finma’s report later in the year ran to thousands of pages and identified deficiencies in governance, controls and record-keeping.
One investigating agent found roughly 80 per cent of the bank’s client relationships were classified as high risk and that 98 per cent of incoming assets came from such clients. People familiar with the bank say those figures are skewed by a small number of large clients and by conservative internal classifications that labelled much of the world high-risk.
Finma’s scrutiny forced changes at MBaer. The bank cut roughly a third of its client base, upgraded compliance systems, introduced enhanced transaction monitoring and reshaped its board and management, said two people familiar with the situation.
But while the company operated under restrictions throughout the process, they were not significantly tightened as remediation progressed.
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After months of corrective measures, Finma told the bank in late January that it would revoke its licence and place it into liquidation – a decision that came as a surprise to the bank’s management, said two people familiar with the situation.
But MBaer’s ability to continue operating in the face of Finma’s findings has raised questions about how the regulator assessed the bank’s risk. Supervisors have a range of tools short of liquidation – including stricter business limits, the appointment of monitors or forcing a sale – but none appears to have been deployed.
“In the eyes of many people – and certainly US authorities – Switzerland is guilty until it proves itself innocent,” said RUSI’s Keatinge. “It has repeatedly reinforced that perception by waiting for others to act first. This could have been an opportunity to change that.”
Finma told the FT it had withdrawn the bank’s licence and ordered its liquidation before the US made its move but Swiss law prevented it from immediately enforcing the moves.
“Suspensive effect was granted as a result of the bank’s appeal and Finma was prohibited by the court from communicating and enforcing the liquidation,” it said. “Finma’s liquidation order only took effect on 27 February, when the bank withdrew its appeal.”
Finma’s final report, released when it announced that MBaer was finally in liquidation, found the bank had serious organisational deficiencies, repeatedly failed to comply with anti-money laundering obligations, had processed transactions for clients under sanctions and allowed some to circumvent asset freezes.
In recent weeks the bank started repaying clients’ money in stages as it carried out anti-money laundering reviews for each of them. But a notice on its website now says that for the time being “no repayment of client funds is possible” after it was cut off from Switzerland’s interbank payments system.
On a recent visit by the FT to MBaer’s offices by Zurich’s lakefront, the lights were on and some employees were in meetings.
Viehweg, who was there assisting liquidators, did not respond to a request for an interview.
Bär was “not available”, a bank employee told the FT. A page on MBaer’s website detailing the banking scion’s back-story has since been removed.
“It’s a sad story,” said one person who knew Bär. “But some of these old family names struggle with the huge pressure on them.”
Additional reporting by Robert Wright in London
Copyright The Financial Times Limited 2026
