The Swiss financial regulator FINMA has accused Rothschild Bank and one of its subsidiaries Rothschild Trust (Schweiz) of serious violations in anti-money laundering rules linked to the 1Malaysia Development (1MDB) state fund scandal.

According to FINMA, the entities failed to effectively clarify where assets in a “significant business relationship” came from. The name of the client was not disclosed.

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“Although there were early indications that this client could be involved in money laundering activities, the institutions decided nevertheless to enter into the relationship and at a later stage considerably expand it,” the watchdog said.

The entities were also accused of failing to document several high-risk transactions.

FINMA has now appointed an auditor to ensure that the entities implement measures to comply with anti-money laundering rules.

With the action on Rothschild, the regulator has closed its 1MDB related proceedings.

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In response, the bank said: “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.”

Several Swiss banks have been accused of being involved in the 1MDB scandal in the past.

In May 2016, the Monetary Authority of Singapore (MAS) ordered Swiss lender BSI Bank to close its Singapore operations in connection to the 1MDB scandal.

In October 2016, MAS also withdrew the licence of Falcon Private Bank and fined UBS in connection to the 1MDB scandal.

Credit Suisse was fined by MAS in May last year for flouting anti-money laundering requirements relating to the same scandal.