Rothschild bank broke money laundering rules in 1MDB case: Swiss watchdog

Swiss bank Rothschild and a subsidiary seriously breached money laundering rules in connection with the massive financial scandal that helped topple Malaysia's corruption-plagued former regime, Switzerland's financial watchdog said today.

Swiss market regulators FINMA also said it had now completed all seven probes into the sprawling scandal that allegedly saw Malaysia's multi-billion dollar state fund raided to buy everything from US real estate to artworks.

"Rothschild Bank AG and one of its subsidiaries have been found to be in serious breach of money laundering rules in the context of 1MDB," a FINA statement said.

"They were in breach of due diligence, reporting and documentation requirements," it added.

The watchdog found that Rothschild and a subsidiary failed to act on "early indications" that a significant client "could be involved in money laundering." Even though the origins of the clients assets were dubious, Rothschild charged ahead in fostering the relationship and even expanded it, before reporting the client to the Swiss money laundering office "after a substantial delay."