Security & Fraud

Danske Bank CEO Thomas Borgen Stepping Down

Danske Bank’s chief executive Thomas Borgen is stepping down from Denmark’s largest bank amid a money laundering scandal with its small but profitable Estonian branch.

According to a report in the Wall Street Journal, Borgen said it “is clear that Danske Bank has failed to live up to its responsibility in the case of possible money laundering in Estonia,” and while the executive said the investigations didn’t find he breached his legal obligations, he is stepping down. Borgen will stay on until the bank names a replacement, noted the Wall Street Journal.

The bank said Wednesday (September 19) that about $233 billion moved through the Estonian branch from 2007 through 2015 and that a large amount of the payments were questionable. The bank said of the 15,000 customers it looked at, it focused on 6,200 that may be involved in money laundering. Of that 6,200, the bank found the vast majority were suspicious. “There is suspicion that there have been employees in Estonia who have assisted or colluded with customers,” the bank said in a press release, reported the Wall Street Journal. Danske said a number of current and former employees in the Estonian branch and at the company’s headquarters didn’t meet their legal obligations as bank employees, according to the WSJ.

On Wednesday (September 18) the WSJ reported Danske Bank officials were aware of problems at its Estonian branch earlier than they indicated. According to that report, citing a correspondence seen by the paper, the bank officials knew that the branch in Estonia had accounts for Russian clients who had been blacklisted. This is the latest indication that Danske Bank officials knew nearly two years before the questionable accounts were shut down that its small but very profitable branch could be involved in an illegal scandal. In July, Danske took a hit as investors started to pay attention to the scandal, which centers on its Estonian branch, 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, all former Soviet Union states.

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