Danske Bank CEO quits in $234 billion money laundering scandal

Cornelia Mascio
Settembre 19, 2018

Mr Borgen said it was clear that Danske Bank had failed to live up to its responsibility and he regretted this.

The Danish bank detailed compliance and control failings amid growing calls for a new European Union watchdog to crack down on financial crime after a series of money laundering scandals which have attracted the attention of USA authorities.

Danske Bank said in a summary of a report covering around 15,000 customers and 9.5 million payments between 2007 and 2015 that Borgen, Chairman Ole Andersen and the board "did not breach their legal obligations".

While the report will help determine the outcome of current criminal probes in both Denmark and Estonia, Danish expert on money laundering Jakob Dedenroth Bernhoft says potential court cases and fines could come years into the future.

A third of Danske Bank's stock market value has been wiped out in the last six months, driven by concerns over a possible inquiry by USA authorities and the penalties this could entail.

Estonia's Baltic neighbour Latvia has been in the centre of various banking scandals, including money laundering, for years after it became a hub for worldwide banking, mainly from neighbouring Russian Federation and eastern European states like Ukraine.

Earlier this month, the Wall Street Journal reported that US law enforcement agencies were also investigating money laundering flows through Danske Bank.

Authorities in the US earlier this year accused Latvia's ABLV of covering up money laundering and the bank was promptly denied USA dollar funding, leading to its collapse.

Danske said it was not able to provide an accurate estimate of the suspicious transactions through its Estonian branch, but said the non-resident portfolio included customers from Russia, Azerbeijan, Ukraine and other ex-Soviet states.

Danske Bank said it would "donate the gross income from the customers in the period from 2007 to 2015, which is estimated at 1.5 billion kroner (201 million euros, $235 million), to an independent foundation which will be set up to support initiatives aimed at combating worldwide financial crime, including money laundering, also in Denmark and Estonia". As a result the Estonian branch did not employ Danske's anti-money laundering procedures.

The bank, whose shares fell as much as 5 percent following the release of the report, also lowered its expectations for annual net profit to 16-17 billion Danish crowns, from a previous range of 18-20 billion.

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