US is probing laundering case: Danske Bank

Bloomberg

Danske Bank A/S said the US has started an investigation into a money laundering case involving Denmark’s biggest bank that has already toppled its chief executive officer and triggered numerous other probes.
The development comes as criminal investigations are under way in Estonia and Denmark, and after Danske said that a large part of about $235 billion that flowed through a unit in the Baltic country between 2007 and 2015 may need to be treated as suspicious transactions. The bank has relieved CEO Thomas Borgen of his duties and reported several employees to the police in connection with the case.
Danske said it has “received requests for information from the US Department of Justice in connection with a criminal investigation relating to the bank’s Estonian branch conducted by the DOJ.” The bank said it is cooperating with all the relevant authorities.
Andreas Hakansson, an analyst at Exane BNP Paribas, said it’s “no surprise” that the US is now looking into the case. “When you have this many suspicious transactions, you can assume some of it would be in violation of US rules and have the DOJ investigate.”
“The concern will now be how big a fine it will be as it’s completely different if it’s issued by a US or European authority,” he said. In Denmark, Business Minister Rasmus Jarlov has already said that Danske may face a fine as high as $630 million. Shares in the bank fell as much as 4.6 percent after the market opened in Copenhagen, pushing it to the bottom of Bloomberg’s index of European financial stocks.
Meanwhile, there’s growing evidence that Danske represents just a small part of a European laundering problem, with cross-border transactions through Estonia alone reaching more than $1 trillion between 2008 and 2015. The Estonian central bank has made clear that cross-border transactions include non-resident and resident flows. It can’t provide an estimate for non-resident flows. The cross-border data compares with Estonia’s GDP in 2017 of 23 billion euros, or $26 billion.
Hermitage Capital CEO and co-founder Bill Browder, who is behind a number of criminal complaints against Danske for its alleged laundering bre-aches, said the scandal uncovered in the Estonia unit involves other Nordic banks, according to an interview with Sweden’s Dagens Industri.