The Swiss Financial Market Supervisory Authority has launched enforcement proceedings against Banque Privée Espírito Santo, the Swiss private banking subsidiary of troubled Portuguese Espírito Santo Financial Group.

The Swiss Financial Market Supervisory Authority has launched enforcement proceedings against Banque Privée Espírito Santo, the Swiss private banking subsidiary of Portugal's troubled Espírito Santo Financial Group.

The focus of the investigation will be on the distribution of securities and financial products of the Espirito Santo Group, FINMA said in a statement.

The Swiss regulator said its investigation will examine the role played by Banque Privée Espírito Santo, which is undergoing voluntary liquidation, in the distribution of securities and financial products of the Espirito Santo Group and whether breaches of supervisory law occurred.

“The influence of the owners of the bank on procedures in Switzerland will also be examined,” FINMA said.

Banque Privée Espirito Santo said in a statement that it was working closely with FINMA, but declined to provide any further details.

In July, Espírito Santo Financial Group agreed to sell its Swiss private banking subsidiary’s client portfolio for the Iberian and Latin American regions to Swiss-based private bank Compagnie Bancaire Helvétique Group for an undisclosed sum.

Banco Espirito Santo Group, which is headquartered in Luxembourg, has been plagued by scandal in the past year. In July, its head, Ricardo Salgado, stepped down as chief executive. Following this he was arrested for alleged tax fraud and money laundering after an audit conducted by Portugal's central bank found a number of financial irregularities at the firm.

The Portuguese government announced on 3 August that it was stepping in with a €4.9 billion ($6.44 billion) rescue plan to rescue Banco Espirito Santo after it posted a first half loss of €3.6 billion. As part of the bailout, the Portuguese lender was shut down and its healthy assets transferred to a new bank called Novo Banco.