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Bloomberg
Denmark’s financial watchdog has reported Danske Bank A/S to the police after it overcharged retail investors.
The bank, which is already under criminal investigation in the US and across Europe for its role in an Estonian money laundering scandal, misled its customers about the returns they could expect on short-term investments, the Financial Supervisory Authority (FSA) in Copenhagen said in a statement. Even though Danske was aware that many of its clients were facing negative net returns, it didn’t alert them to that risk, the FSA said.
The scandal, centred around an investment platform called Flexinvest Fri, has already cost a top Danske executive his job and comes as the bank is struggling to rebuild its image against the backdrop of its dirty-money affair. Shares in Danske Bank have plunged about 30 percent this year after falling almost 50 percent in 2018, as investors turned their backs on the lender.
In its statement, the FSA called Danske’s practice of overcharging retail clients “a very serious breach†for which the bank now faces a number of regulatory orders. These include conducting new reviews of each customer using Flexinvest Fri to ensure that they’ve been sold appropriate investment products.