Danske Bank hit with €197m lawsuit relating to money laundering scandal

Danish lender is being investigated over $220bn put through its unit in Estonia from 2007 to 2015

A group of international investors  has filed what it says is the first in a series of lawsuits against Danske Bank in connection with a money laundering scandal

A group of international investors has filed what it says is the first in a series of lawsuits against Danske Bank in connection with a money laundering scandal

 

A group of international investors managing trillions of dollars in assets has filed what it says is the first in a series of lawsuits against Danske Bank in connection with a money laundering scandal engulfing Denmark’s largest lender.

The writ, which was filed on Friday in the district Court of Copenhagen by law firm Nemeth Sigetty Advokatpartnerselskab, is for about 1.5 billion kroner (€197m), according to a statement.

The International Securities Associations and Foundations Management Company for Damaged Danske Investors, or ISAF-Danske, represents private and institutional investors, including pension funds, insurance companies and investment managers in the US, Canada, Japan, Sweden, Luxembourg, Norway, Austria, Germany, France, Portugal, Spain and Australia.

The lawsuit details how Danske Bank “violated Danish capital market laws by deliberately misleading and keeping investors in the dark for years, by not disclosing that its financial income statements and retained earnings included significant earnings from known illegal high-risk money laundering activities”.

The bank’s shares were little changed after the announcement, and were up 0.5 per cent on Monday afternoon in Copenhagen.

Danske Bank is being investigated across Europe and in the US after failing to screen about $220 billion that gushed through its non-resident unit in Estonia from 2007 to 2015.

Coalition

The investor coalition said on Friday that it was also conducting “a special investigation into the potential significant additional earnings generated at the Danske Bank headquarter level”.

Such an investigation “focuses on the potential income from ‘spreads’ made from the FX currency market making activities, associated with the more than 200 million euros in suspicious wire transfers”, it said.

Danske said it was “defending itself against these claims”.

“The timing and completion of any such lawsuit is uncertain, and we consider any development together with our external counsel. At this stage we have no further comment,” it said in a statement. – Bloomberg