The collapse of MBaer Merchant Bank, a Zurich-based institution with ties to prominent Swiss financial figures, has sent ripples through the Swiss financial landscape. The bank’s downfall, triggered by concerns over compliance failures and dealings with high-risk clients, particularly those from Russia and Venezuela, underscores the ongoing challenges facing Switzerland in maintaining its reputation as a stable and trustworthy financial center. At the heart of the unraveling was a critical assessment by Bignia Vieli, a respected legal expert and partner at Wenger Vieli, who uncovered systemic shortcomings in the bank’s risk management and client vetting processes. The case highlights the delicate balance between attracting international capital and upholding rigorous regulatory standards, a challenge that continues to define Switzerland’s role in global finance.
MBaer, founded by Mike Bär, a descendant of the renowned Julius Bär, experienced rapid growth in recent years, attracting a clientele that included individuals and entities often overlooked by more cautious institutions. This expansion, however, came at a cost. As the bank scaled, concerns mounted regarding its ability to adequately assess and mitigate the risks associated with its increasingly complex customer base. The situation reached a critical point in 2023, prompting the bank’s shareholders to seek an independent evaluation of its compliance procedures. This led to the appointment of Bignia Vieli to the board, tasked with a comprehensive review of the bank’s exposure to potentially problematic clients.
A Deep Dive into Compliance Failures
Bignia Vieli’s investigation revealed a deeply flawed compliance system at MBaer. Under the leadership of Frank Grundler, the long-serving head of the compliance department, critical processes such as client onboarding, documentation, source of funds verification, and screening against international watchlists were consistently neglected. According to sources, Grundler’s warnings about potential risks were routinely overridden by Mike Bär and Paul von Mérey, a co-founder of the bank with a history of controversial dealings. This pattern of disregard for compliance protocols created a fertile ground for illicit financial flows and exposed the bank to significant legal and reputational risks.
The dynamic between the key players at MBaer – Bär, von Mérey, and Grundler – proved to be a critical factor in the bank’s downfall. Von Mérey, who previously faced scrutiny at Julius Bär for his close relationship with a wealthy client that extended beyond traditional banking services, reportedly prioritized attracting new business over ensuring regulatory compliance. In 2023, the Tages-Anzeiger reported that von Mérey inherited a villa in Nice, France, from a client with whom he had a particularly close relationship. The report detailed the circumstances surrounding the inheritance, raising questions about potential conflicts of interest. This history, combined with Bär’s apparent willingness to prioritize growth over caution, created a culture where compliance concerns were routinely dismissed.
Vieli’s Report and the Board’s Response
In late 2024, Bignia Vieli presented her findings to the MBaer board in a comprehensive report. The report, described as “hochexplosiv” (highly explosive) by sources, detailed the systemic failures within the bank’s compliance framework and highlighted the extent of its exposure to high-risk clients. The board, led by Marcel Aellen, a former official from the Swiss Financial Market Supervisory Authority (FINMA), was reportedly shocked by the severity of the findings. Aellen, who previously handled the case of Hans Vögeli, the former CEO of Zürcher Kantonalbank, was brought in with the expectation that his regulatory experience would aid navigate the bank through potential challenges.
However, instead of taking decisive action to address the identified deficiencies, the board opted to downplay the report’s findings. This decision proved to be a fatal mistake. Vieli, unwilling to compromise her professional integrity, resigned from the board in December 2024, just eighteen months after her appointment. Her departure signaled a growing crisis within the bank and ultimately paved the way for increased scrutiny from FINMA.
FINMA Intervention and the US Response
Following Vieli’s resignation, FINMA launched an investigation into MBaer’s operations, prompted by concerns about its dealings with politically exposed persons (PEPs) and individuals linked to illicit activities. Despite the regulatory pressure, MBaer’s leadership initially adopted a defiant stance, attempting to challenge FINMA’s authority and defend its practices. The bank even managed to win two initial battles against FINMA at the Federal Administrative Court in February 2025. However, this temporary reprieve proved short-lived.
The turning point came when FINMA enlisted the support of US authorities, raising concerns about MBaer’s potential violations of US sanctions and anti-money laundering regulations. Faced with the prospect of losing access to the US financial system, MBaer’s leadership quickly capitulated. On February 27, 2026, FINMA announced its intention to wind down MBaer Merchant Bank, citing the bank’s failure to address systemic compliance deficiencies and its exposure to unacceptable risks. Reuters reported on the regulator’s decision, emphasizing the potential damage to Switzerland’s reputation as a financial center.
The Broader Implications for Swiss Finance
The collapse of MBaer has raised serious questions about the effectiveness of Switzerland’s regulatory oversight and the potential for illicit financial flows through its banking system. FINMA has acknowledged that the bank’s practices posed a risk to the integrity of the Swiss financial center, prompting a review of its own supervisory procedures. The case serves as a stark reminder of the importance of robust compliance frameworks and the need for proactive risk management in the face of evolving global threats.
Bignia Vieli’s role in uncovering the issues at MBaer has been widely praised, highlighting the importance of independent oversight and ethical leadership within the financial industry. Her willingness to resign rather than compromise her principles underscores the critical role that individuals play in safeguarding the integrity of the financial system. Wenger Vieli, her firm, is known for its expertise in financial market law, and Vieli herself has extensive experience advising banks and financial service providers on supervisory and civil law matters. According to Wenger Vieli’s website, she possesses a deep understanding of the regulatory landscape and a commitment to upholding the highest standards of professional conduct.
The fallout from the MBaer scandal is likely to reverberate through the Swiss financial industry for some time to come. Increased scrutiny from regulators, coupled with heightened public awareness of the risks associated with opaque financial practices, will likely lead to a more cautious and compliance-focused approach to banking in Switzerland. The case too underscores the growing importance of international cooperation in combating financial crime and protecting the integrity of the global financial system.
The next key development in this case will be the completion of the liquidation process overseen by FINMA. The regulator is expected to provide further details on the extent of the bank’s liabilities and the steps being taken to protect the interests of its creditors and clients. The Swiss financial industry will be closely watching these developments, seeking to learn lessons from the MBaer debacle and prevent similar incidents from occurring in the future.
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