Switzerland’s Federal Prosecutor has opened an investigation into the state-backed takeover of Credit Suisse (AMJL) by UBS Group, the office of the attorney general said Sunday.

The prosecutor, based in the Swiss capital Bern, is looking into potential breaches of the country’s criminal law by government officials, regulators and executives at the two banks, which agreed on an emergency merger last month to avoid a meltdown in the country’s financial system.

There were “numerous aspects of events around Credit Suisse” that warranted investigation and which needed to be analyzed to “identify any criminal offenses that could fall within the competence of the [prosecutor],” it said in a statement.

“The Office of the Attorney General wants to proactively fulfill its mandate and responsibility to contribute to a clean Swiss financial center and has set up a monitoring system so that it can take action immediately on any issues that fall within its area of responsibility,” it added.

It gave no indication of any specific aspects of the merger agreement it might look into or how long the investigation might last.

Both UBS and Credit Suisse declined to comment.

Out of the ordinary

“It’s astonishing that the prosecutor would comment,” said Mark Pieth, professor emeritus of the University of Basel, where he has taught criminal law and criminology. But the rescue “is so out of the ordinary that they had to say something.”

Pieth said the prosecutor could be probing breaches of secrecy provisions by officials, or the trading on inside information, adding that the wiping out of some bondholders as planned under the deal is also problematic.

In the deal announced March 19 and orchestrated by the Swiss government, the central bank and market regulator, UBS would acquire rival Credit Suisse for 3 billion Swiss francs ($3.3 billion). The bank is trying to close the deal by as soon as the end of April, sources have told Reuters.

The Swiss public and politicians have voiced concerns about the level of state support, with nearly 260 billion Swiss francs in liquidity and guarantees offered by the government and Swiss National Bank.

A poll of Swiss economists found that nearly half think the takeover of Credit Suisse was not the best solution. They warned that the situation had dented Switzerland’s reputation as a banking center.

The takeover, which was also designed to help secure financial stability globally during a period of turmoil, has sparked concern among critics about the size of the merged bank, with $1.6 trillion in assets and more than 120,000 staff worldwide.

Up to 30% of staff could lose their jobs due to the takeover, according to an unnamed senior UBS manager quoted in Swiss media.