Switzerland’s financial regulator has accused Rothschild Bank AG and its trust subsidiary of violating anti-money laundering law in relation to 1MDB, the troubled Malaysian sovereign wealth fund.
According to the regulator, both Rothschild Bank AG and Rothschild Trust AG failed to check where assets from a client came from. The firms reportedly disregarded signs that the funds could be connected to money-laundering and took the money anyway. The companies run by the Rothschild family are also accused of reporting on the issue too late.
“Specifically, they were in breach of due diligence, reporting and documentation requirements,” Financial Market Supervisory Authority (FINMA) said in a statement. “Finma will appoint an audit agent to review enhancements already put in place by the institutions.”
“We constantly strengthen our systems and procedures and are determined to continue to do so to identify and combat the increasingly sophisticated financial crime faced by the industry,” the bank’s spokesperson told Reuters in relation to the claims by FINMA.
An investigation into alleged illegal practices by 1Malaysia Development Berhad was launched as early as in 2011. Top management of the institution is under suspicion for reported embezzlement of funds designated for state economic development projects. The FBI joined the case three years ago with investigators from Hong Kong, Singapore, Luxembourg, the UAE, the Seychelles and Australia also involved.
The probe led to the arrest of former Malaysian Prime Minister Najib Razak earlier this year. The top official was accused of alleged breach of trust and abuse of funds.
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