Now the US’s SEC is investigating Danske Bank
The bank is already the target of criminal probes in Denmark, Estonia and France, and is being investigated separately by the US justice department
Copenhagen — Danske Bank says the US Securities and Exchange Commission (SEC) is now conducting an investigation into the Danish lender’s money-laundering case.
The bank is already the target of criminal probes in Denmark, Estonia and France. It’s also being investigated separately by the US justice department, and is “co-operating with all relevant authorities in order to clarify the full details of the case,” it said in a statement on Thursday.
Shares in the bank declined on the announcement, and traded as much as 5% lower in Copenhagen.
News of yet another investigation comes as a $230bn scandal engulfing Danske continues to spread. Swedbank AB on Wednesday became the latest Nordic lender to be targeted by allegations of money laundering, wiping well over $5bn off its market value in less than two days.
Though not a surprise, the SEC investigation adds to “uncertainty over potential fines, both US and domestic” and that uncertainty is probably “set to drag into 2020,” said Philip Richards, an analyst at Bloomberg Intelligence in London. “And while we expect total fines in the region of $2bn-$2.5bn, there is potential for the final amount to be multiples of that.”
Danske is accused of letting a tiny branch in Estonia become a hub through which illicit funds from the former Soviet Union made their way to the West. The bank’s investors are bracing for fines, potentially of billions of dollars.
“We have no information about when the investigations conducted by DOJ and SEC are expected to be completed, nor do we know what the outcome of these will be. We continue to co-operate with the authorities in order to establish a complete picture of the events of the case,” Jesper Nielsen, interim CEO at Danske, said in the statement.
The SEC deems an investigation necessary when it sees conduct that includes “misrepresentation or omission of important information about securities,” according to its website. It also has the power to levy fines.