Danske scandal grows as New York presses Nordea, SEB

Bloomberg

New York’s financial regulator is asking two Nordic banks for detailed information about their transactions with Danske Bank A/S as part of a burgeoning investigation into global money laundering, according to a person familiar with the matter.
The two banks, Nordea Bank Abp of Finland and SEB AB of Sweden, must also give New York’s Department of Financial Services more information about their work with Mossack Fonseca & Co, a law firm that set up tax shelters for wealthy individuals around the world, the person said, citing letters to the banks dated Thursday.
The broad request for information came the same day that Swedbank AB’s chief executive officer was fired after investors said she had played down the seriousness of the bank’s exposure to the scandal. The bank also reportedly withheld information from regulators, including the DFS.
There’s no indication that Nordea or SEB are a target of the investigation. But the DFS letters, as described by the person familiar with them, suggest that the regulator wasn’t satisfied with the information it received after a similar request in February.
A spokesman for the DFS declined to comment.
In a comment sent by pokeswoman Afroditi Kellberg, Nordea said it’s cooperating closely with authorities “in all the countries where we operate.” “Combating financial crime is part of our daily operations,” Nordea said. “In cases where we see suspicious transactions, we report it to the authorities for them to take forward.”
SEB spokesman Frank Hojem said the bank has “continuous contact” with the authorities that supervise the markets in which it operates, in a written comment. “When it comes to individual requests, it’s a dialogue we have directly with the authorities in question. That’s a completely normal part of our continuous operations.”
SEB’s CEO, Johan Torgeby, said this week that his bank had “found no indication” that “we have systematically been used for money laundering.” Still, Torgeby said, “I can never guarantee that we have never been the victim of a financial crime or money laundering.”
Revelations that Danske Bank helped move much of $230 billion in mostly Russian money to the Western banking system has broadened into one of the biggest money-laundering scandals in history. As authorities have dug into the matter, other banks in the region have come under scrutiny.
The DFS’s letters in February focussed on Mossack Fonseca, whose secret files about wealthy clients were stolen and leaked on a mass scale in 2015. The new letters, according to the person familiar with the matter, also seek information about the banks’ dealings with FBME Bank Ltd, an institution with operations in Cyprus and Tanzania that was cut off from the US financial system in 2017 and subsequently closed.
The DFS asked about connections with Ukio Bankas of Lithuania, a defunct lender linked in news reports to a Russia-based money-laundering operation known as the Troika laundromat.