Magazine article American Banker

Malvern Director Resigns over Bank's Dealings with Foreign National

Magazine article American Banker

Malvern Director Resigns over Bank's Dealings with Foreign National

Article excerpt

Byline: Paul Davis

A Malvern Bancorp director has resigned following a disagreement over one of the Paoli, Pa., company's clients. Michael Moss wrote in a Feb. 22 letter to Malvern's board that the $727 million-asset company faces "grave legal and reputational risks" for doing business with a foreign national. The letter, which had several redactions that included the client's name, was attached to a regulatory filing disclosing Moss' resignation. The client "bears all the hallmarks of exactly the sort of individual the Bank Secrecy Act's know-your-customer rules were designed to detect," Moss added, claiming that the client had been "expelled from his own banking system" and had been "doing business in offshore havens known for money laundering." Moss expressed his opinion that conducting business with the individual, whom he claimed was introduced to the bank by an unnamed activist investor, puts Malvern at risk of violating anti-money-laundering requirements of the Patriot Act, the Bank Secrecy Act and the Foreign Corrupt Practices Act, along with sanctions tied to the Treasury Department's Office of Foreign Assets Control. Malvern said in its filing that the client is a depositor. While Malvern did not disclose any more information about the client, the filing noted that the company had opened private banking offices in Villanova, Pa., and Morristown, N.J., as part of its strategic business plan. "The bank conducted proper due diligence and followed all applicable legal requirements, including those of the Bank Secrecy Act, in connection with opening the depositor's account," the filing said. …

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