Swiss regulator Finma said it would claw back more than 1 million Swiss francs in profits from a private bank for accepting funds linked to the Brazilian Petrobras and Odebrecht scandals.

More than a dozen Swiss banks have been accused of accepting illicit funds linked to Brazil's four-year «Lava Jato», or car wash, scandal. On Thursday, Swiss financial regulator Finma ordered PKB, a Lugano-based private bank, to pay back 1.3 million Swiss francs in profits that it earned from corrupt money related to Petrobras and Odebrecht, firms ensnared in the probe.

The Swiss bank maintained dozens of accounts linked to state-backed oil firm Petrobras and to Odebrecht, an engineering conglomerate. Switzerland's prosecutor is conducting more than 60 criminal investigations in relation to the probes and has seized more than 1 billion Swiss francs. The Brazilian scandal comes alongside high-profile money-laundering scandals for Switzerland including 1MDB.

Haphazard Handling

Finma rapped Banca della Svizzera Italiana, or BSI, over Petrobras as well. The Ticino-based private bank, now part of EFG International, was also mired in the 1MDB scandal. Banque Heritage, controlled by the wealthy Esteve family, was equally punished in 2016, and another case is still pending, Finma said.

PKB carried out transactions, sometimes involving millions of Swiss francs, without question, and failed to do background checks on the clientele. It completed forms haphazardly, and ignored a warning from its own information technology about high-risk dealings, the regulator detailed.

Paltry Fine?

Like Gazprombank, which was also sanctioned over money-laundering violations on Thursday, PKB will be subject to an external monitor who makes sure it is improving its procedures for handling dicey funds. 

While the fine for PKB is paltry, it is notable because Finma doesn't have the same financial penalty power as agencies in the U.S. , including the Department of Justice or New York financial supervisor. The Swiss overseer can only claw back ill-earned profits, not levy fines.

Under former UBS banker Mark Branson, Finma has set an emphasis on combating money-laundering in recent years. Eight bankers have been banned for their behavior, and seven more have found themselves in enforcement proceedings in the last two years.