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Swiss bank PKB broke money-laundering rules in Brazilian cases: FINMA

Swiss bank PKB broke money-laundering rules in Brazilian cases: FINMA

(This February 1 story has been refiled to fix typo in 13th paragraph)

By John Revill and Michael Shields

ZURICH (Reuters) - Swiss private bank PKB Privatbank SA Lugano committed serious breaches of money laundering regulations in business linked to Brazilian groups Petrobras and Odebrecht, the Swiss financial watchdog FINMA said on Thursday.

Switzerland’s attorney general said it had launched criminal proceedings against the bank for failing to prevent possible crimes being committed.

The Financial Market Supervisory Authority said it had “ordered the disgorgement of 1.3 million Swiss francs ($1.4 million) in unlawfully generated profits and will appoint an external auditor to supervise the measures taken.”

FINMA has investigated more than a dozen Swiss banks in relation to the Petrobras and Odebrecht cases and launched four enforcement proceedings, one of which is pending.

PKB said in a statement the FINMA decision would have no impact on the smooth functioning of the bank. It also said it was cooperating with the authorities on the issue, which it said involved one individual who abused the bank’s trust.

The OAG said in a statement it had opened a criminal investigation into PKB, following disclosures made by the bank, confirming a story that appeared in the online edition of Swiss newspaper Luzerner Zeitung.

The investigation, launched on Jan. 12, was also based on findings from the OAG’s own inquiry into suspected money laundering related to Petrobras and Odebrecht.

The OAG said it suspected deficiencies in the internal organization of the bank, which meant it could not prevent possible crimes being committed.

A company can be prosecuted under Swiss law if it has not taken necessary measures to prevent crimes, like money laundering or corruption, being committed.

The OAG said it had requested a copy of FINMA’s decision.

Regarding the OAG’s actions, PKB spokesman Pascal Dubey said the bank had approached the authorities in the first place.

“We have fully recognized there was an issue which is why we went to the authorities,” he said, adding that the bank was seeking to close the matter.

“There was one issue with one employee who abused our trust. FINMA has recognized that we have done everything we could after the situation came to light and that is why we have no restrictions on our activities,” he added.

More than 100 powerful politicians and businessmen have been convicted in connection with an investigation focused on political kickbacks and money laundering at Petrobras and construction firms, such as Odebrecht, that paid billions in bribes to politically appointed former Petrobras executives.

Petrobras says it was a victim of corrupt individuals, and Brazilian prosecutors have recovered and returned more than $470 million to the oil firm’s coffers so far.

Odebrecht signed a deal with U.S., Brazilian and Swiss officials and has been fined. It admitted to carrying out bribery and a series of other corrupt acts, mostly in Latin America and Africa.

Additional reporting by Brad Brooks in Sao Paulo; Editing by Brenna Hughes Neghaiwi and Edmund Blair

Our Standards:The Thomson Reuters Trust Principles.


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