Legal authorities in Switzerland have launched criminal proceedings against the bank, following this week's announcement that it has been banned from Singapore for serious failings around corrupt transactions.

Swiss legal authorities have joined in action against Falcon Private Bank this week, opening criminal proceedings against the Zurich-headquartered lender regarding transactions connected to Malaysian state-run fund 1MDB.

The announcement today from the Office of the Attorney General of Switzerland, based in Berne, follows this week’s move by the Monetary Authority of Singapore to revoke Falcon’s banking licence in Singapore following the discovery of serious lapses in anti-money laundering controls. The action by MAS comes just over four months after it took similar action against BSI in Singapore, part of Switzerland-based BSI, for similar shortcomings.

Prominent figures, including Malaysia’s prime minister, are accused of using 1MDB to finance personal spending. The corruption scandal has already seen MAS censure and fine a number of banks, while authorities in Switzerland have announced they had frozen bank accounts several months ago. Legal authorities in Luxembourg and the US are also involved.

“The OAG suspects deficiencies in the internal organisation of Falcon Private Bank Ltd. It is believed that due to these deficiencies, the bank was unable to prevent the commission of the offences currently under investigation in the criminal proceedings relating to 1MDB,” the Swiss legal body said in a statement.

The OAG said Swiss law allows prosecution of a legal entity suspected of “not taking all the reasonable organisational measures that are required to prevent natural persons from committing offences, in particular money laundering or corruption offences”.

As with the case of criminal proceedings brought against BSI Bank SA on 23 May, the opening of proceedings today against Falcon is “based on the information revealed by investigations relating to 1MDB and on issues raised in the enforcement decision made by FINMA [the Swiss regulator] from early October 2016”, the OAG continued.