Over nearly 150 years, Portugal's Espírito Santo clan built a corporate dynasty whose interests ranged from European banks to Miami condos to a diamond mine in Angola. Its current patriarch was nicknamed "Dono Disto Tudo," or "Owner of All This."

Now the empire is in ruins. The family's prized asset and Portugal's second-biggest bank, Banco Espírito Santo SA, collapsed this month, and Espírito Santo's main holding companies have filed for bankruptcy amid allegations of accounting problems and fraud.

The scandal has rocked Portugal's political and business elites and sent shock waves through Europe's fragile financial markets. Portugal's main stock-market benchmark has tumbled 22% since Espírito Santo's crisis intensified early last month. The fact that regulators didn't spot the company's problems has rekindled fears among investors that trouble might be lurking in other European banks.

At the heart of the affair lies a small Swiss financial company now called Eurofin Holding SA, which was set up 15 years ago largely to handle financial transactions for the Espírito Santo family and its companies.

For years Eurofin was partly owned by an Espírito Santo company. Eurofin played an important role in buttressing Espírito Santo's finances, according to internal Eurofin emails, trading records and other documents reviewed by The Wall Street Journal, as well as former executives and other people familiar with the relationship.