Swiss Probe Banks to Gauge Exposure to Petrobras Scandal

November 6, 2015

  • Finma focused on bank reporting of suspicious activity
  • Swiss regulator didn’t identify banks it’s looking into

Switzerland’s finance regulator is investigating local banks to gauge their possible exposure to a widening scandal surrounding Brazilian oil producer Petrobras Brasileiro SA.

The regulator, known as Finma, said it is looking into whether banks and securities trading firms met their due-diligence obligations in possible cases of money laundering, and whether any possible incidents were reported to authorities. Bern, Switzerland-based Finma didn’t identify the banks that it began talking to months ago as part of the ongoing investigation.

Switzerland’s attorney-general in March released $120 million of $400 million in assets tied to suspicious Petrobras-related transactions that had previously been frozen. The Rio de Janeiro-based oil and gas producer is mired in a corruption scandal in which company executives allegedly directed hundreds of millions of dollars from overpriced contracts to politicians.

The worsening affair has sent investor confidence in Brazil tumbling, plunged Latin America’s largest country into recession and triggered calls for Brazilian President Dilma Rousseff to be impeached over her handling of the matter.

Swiss prosecutors said in March they’d uncovered more than 300 accounts belonging to senior Petrobras executives and its suppliers at more than 30 banking institutions apparently used to “process bribery payments.” Valor reported on the Finma probe earlier.

Swiss Attorney-General Michael Lauber and his Brazilian counterpart Rodrigo Janot have complimented each other on the speed and cooperation with which the two countries’ justice systems have worked together, at a time when Swiss justice has been criticized for moving too slowly.

Lauber earlier this year was forced into defending seven years of inaction by Swiss federal prosecutors after reports said drug cartels and arms dealers laundered money through HSBC Holdings Plc’s private bank in Geneva. Seven years after convicted fraudster Bernie Madoff admitted to cheating investors, the first criminal trial of a Geneva feeder fund that channeled money to Madoff will begin in December.


Swiss Probe Banks to Gauge Exposure to Petrobras Scandal