Swiss bank probed in connection with Malaysia fund scandal

The Swiss attorney general's office has opened criminal proceedings against a Swiss bank in connection with a probe into suspected embezzlement of a Malaysian state investment fund.

The office said Tuesday that it "suspects deficiencies in the internal organization" of BSI bank, based in Lugano. It added in a statement: "It is believed that due to these deficiencies, the bank was unable to prevent the commission of offenses currently under investigation in the criminal proceedings relating to 1MDB."

Investigations into the 1MDB fund have indicated that $4 billion earmarked for development projects in Malaysia may have been misappropriated from state-owned companies.

Switzerland says part of the money was transferred to accounts there. It opened an investigation last year on suspicion of bribery and money laundering, among other offenses.