Luxembourg officials have fined the local arm of Swiss private bank Edmond de Rothschild more than $10 million, and media reports have claimed the penalty is linked to a Malaysian scandal-hit fund.

Luxembourg officials said yesterday that they had fined the local arm of Swiss private bank Edmond de Rothschild more than $10 million, and media reports have claimed the penalty is linked to a Malaysian scandal-hit fund.

The Commission de Surveillance du Secteur Financier (CSSF) said in a statement that Edmond de Rothschild had been fined nearly €9 million ($10.1 million) for failing to implement adequate safeguards against money laundering.

Although there was no mention of 1Malaysia Development Berhad, more commonly known as 1MDB, in the statement, Reuters reported that the fine was a result of Edmond de Rothschild handling funds connected to the fund, citing a source familiar with the matter.

1MDB, Malaysia's state-owned investment fund, is subject of probes into alleged money laundering in at least six countries including the US, Singapore and Switzerland.

If Reuters' report is correct, Edmond de Rothschild will be the latest Swiss bank to be swept up in the 1MDB case.

The scandal has already resulted in the closure of BSI and Falcon Private Bank in Singapore, and numerous jail sentences, fines and indictments  have been handed to former banks over their affiliations with the fund.

WealthBriefing, our sister publication, has reached out to Edmond de Rothschild for comment.

In January, a New Zealand court ruled that the family of Low Taek Jho, a flamboyant Malaysian financier at the epicentre of 1MDB probes, could replace its former trustee, Rothschild, with Cayman Islands-based FFP.