(Adds Swiss investigation in paragraph five)
ZURICH, June 22 (Reuters) - Luxembourg watchdogs have fined the local arm of Swiss private bank Edmond de Rothschild for its handling of funds linked to scandal-hit Malaysian investment fund 1MDB, a source familiar with the matter said on Thursday.
The authorities and the bank confirmed Edmond de Rothschild had been fined nearly 9 million euros ($10.1 million) for failing to take proper safeguards against money laundering. They did not comment on news reports that the case concerned 1MDB.
Paying the fine "marks the end of the proceeding in which it has actively participated", the bank said in a statement, noting the Luxembourg arm had taken measures since the first half of 2016 to strengthen its compliance and risk control procedures.
The group installed a new CEO of Edmond de Rothschild (Europe) in Luxembourg last year in a management shake-up.
Swiss watchdog FINMA said it was conducting its own enforcement proceedings against the bank to determine whether the group had fulfilled anti-money-laundering standards.
Rothschild is the latest Swiss bank to be swept up in the 1MDB case, which has triggered money-laundering investigations in at least six countries including Switzerland, Singapore and the United States.
Malaysian Prime Minister Najib Razak, who chaired 1MDB's advisory board, has denied any wrongdoing.
As part of an extensive review into 1MDB-related transactions, Singapore has shut down the local units of Switzerland's BSI Bank and Falcon Bank due to failures of money laundering controls and improper conduct by senior management, frozen millions of dollars and charged several private bankers.
The review uncovered a complex web of transactions involving shell companies and individuals operating in many jurisdictions, including the United States, Switzerland, Hong Kong, Luxembourg and Malaysia.
Singapore's central bank last month fined Credit Suisse and United Overseas Bank (UOB) a total of S$1.6 million ($1.15 million) for breaching anti-money laundering rules in transactions related to 1MDB.
Last year, it fined DBS, UBS, Standard Chartered and private bank Coutts for breaches of Singapore's anti-money laundering laws in connection to 1MDB transactions.
Swiss agency FINMA has already reprimanded Credit Suisse and UBS for dealings surrounding 1MDB.
($1 = 0.8953 euros)
$1 = 1.3894 Singapore dollars Reporting by Oliver Hirt and Silke Koltrowitz; Editing by Michael Shields and Susan Thomas