Rothschild & Co will sell its wealth planning and trust business to a senior executive in a management buyout (MBO). Financial terms of the deal were not revealed, the the deal is understood to be funded by an unnamed investor.

Earlier this year, the trust business was rebuked by FINMA (Swiss Financial Market Supervisory Authority) over serious anti-money laundering rule breaches linked to the 1Malaysia Development (1MDB) state fund scandal.

The division will be sold to senior Rothschild executive Richard Martin. In a statement Martin commented: “We will continue to work closely with Rothschild & Co, providing a seamless service to our existing clients and with the intermediary community to address the needs of successful international families everywhere.”

The divestment is intended at increasing focus on the firm’s core wealth management and private banking operations.

The transaction is anticipated to close in the first quarter of next year subject to regulatory approvals. The trust will adopt a new brand next month.

Alexandre de Rothschild, the executive chairman of Rothschild & Co Gestion, the managing partner of Rothschild & Co, said: “Following a strategic review of our private wealth business, we have decided to focus on growing our wealth management operations. In a changing environment, we believe that the trust business can operate more successfully in an independent structure.”