Bank Regulation

Investors Flee Danske Bank Following Money Laundering Allegations

Swiss Banks Laundering Money In London

Danske Bank is facing backlash from a money laundering scandal that has now resulted in it losing client Unity Technologies, a video game startup that is valued at $2.6 billion.

According to a report in the Financial Times, David Helgason, the entrepreneur behind Unity Technologies, told the Financial Times that while it’s not going to be easy to switch to another bank, he wanted to take a stance because the bank is caught up in a money laundering scandal that is hurting its reputation. “Management should not just ensure that their business follows the law (as you apparently have done), but also make sure their actions can withstand the light of day. And there you have failed so seriously that we your customers need to draw the consequences and move on,” he wrote in an open letter on Facebook, according to the Financial Times.

Late last week shares of Danske took a hit as investors started to pay attention to the scandal, which centers on its branch in Estonia where billions of dollars worth of suspicious transactions took place. The transactions reportedly happened between 2007 and 2015 and involved money from Russia, Azerbaijan, and Moldova — former Soviet Union states. “It is very serious. If you look at this scandal, you can compare it to the most serious money laundering scandals in Europe. It’s a disaster for the bank,” said Jakob Dedenroth Bernhoft, a Danish expert on money laundering, in the same report.

In addition to losing banking customers, Danske is facing more pressure from the government in Denmark — which said it could confiscate any profits made — as well as investor concerns that the U.S. may join Denmark, Estonia and France in investigating the scandal.  Pointing to the $630 million Deutsche Bank was fined by U.S. and U.K. regulators because of money laundering and HSBC‘s $1.9 billion fine paid back in 2012, the report said Danske’s scandal may be just as big.

——————————–

LATEST INSIGHTS:

Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. Check out our latest Digital Fraud Report:

TRENDING RIGHT NOW

To Top