Danske Bank Rebuked Over Lacking Money Laundering Controls

Denmark-based Danske Bank has come under fire for lackluster protocols in place following a money laundering scandal, according to a Wednesday (Oct. 20) report from the Financial Times.

Sweden’s Financial Supervisory Authority pointed out deficiencies in Danske Bank’s money laundering prevention efforts and said the bank had not adequately evaluated how its financial products and services could be harnessed by scammers, according to the report. The financial regulator gave the bank a deadline of June 2022 to fix the issues, per the report.

See also: Jittery Investors Dump Shares Of Nordic Banks After Reports Of FBI Investigation

Danske Bank had previously acknowledged that authorities in the U.S., as well as Denmark, Estonia and France, had launched an investigation related to suspicious transactions that passed through its Estonian banking unit, PYMNTS reported in December 2020.

At the time of the PYMNTS report, Danske Bank stock prices had dropped by 4.2 percent after a Swedish newspaper reported that authorities were investigating money laundering and fraud allegations.

Related: Danske Bank To Slash Jobs As Money Laundering Allegations Mount

Last October, Danske Bank announced that it would cut up to 1,600 jobs stemming from the money laundering scandal within the next year. The cost-cutting measure came in the wake of investigations and lawsuits from shareholders over allegations that the bank participated in suspicious trade deals.

The planned staff reduction was rolled out in conjunction with its “Better Bank” plan, which included a new commercial leadership team comprised of 12 senior executives from across Danske’s various business lines and its executive team.

Danske’s staffing and management changes stem from the fact that financial regulators in a number of countries were investigating $235 billion in payments made through a small branch in Estonia from 2007 to 2015, per reports.

The bank awaits the outcome from U.S. regulators and criminal investigators, who can levy hefty fines and sanctions on former Danske executives, according to the Financial Times.

Read more: Danske’s Money Laundering Fine Could Be Lower Than Expected In US

Danske may avoid heavy fines in the U.S. since it does not have a banking license in the country.