Swedbank Review Criticizes Ex-CEOs For Anti-Money Laundering Failings -- Update
By Dominic Chopping
STOCKHOLM--The law firm hired by Swedbank AB to investigate
potential historical money laundering said Monday that it found the
lender had inadequate systems to manage risk but didn't conclude
that Swedbank engaged in money laundering.
The law firm found payments to customer accounts worth 17.8
billion euros ($19.03 billion) and payments from customer accounts
worth EUR18.9 billion in the bank's Baltic subsidiaries between
2014 and 2019 that represented a high risk for money
However, it said it cannot conclude that money laundering
actually took place.
Swedbank came under scrutiny in February last year after a
Swedish TV show reported that billions of dollars of potentially
illicit funds may have passed through the bank's Estonian branch.
In response, it hired law firm Clifford Chance to investigate
customers, transactions and activities from 2007 to March 2019 and
how the bank handled internal and external information
Clifford Chance on Monday presented its findings, saying it had
found a number of shortcomings in Swedbank's anti-money laundering
It said Swedbank Estonia and Swedbank Latvia actively pursued
high-risk customers and Swedbank Estonia accepted certain high-risk
customers who had been customers of another bank in Estonia.
High-risk customers in Baltic banking were also allowed to open
accounts in the bank's other business areas in Sweden.
The bank took on high-risk customers without proper
documentation and some employees kept client information outside of
Swedbank's regular customer databases and repeatedly overlooked
potentially suspicious transactions, Clifford Chance said.
In addition, the law firm said that Swedbank CEOs appeared to
lack an adequate appreciation for the risk posed by the high risk
non-resident business in the Baltics.
It said that former CEO Michael Wolf, who served from 2009
through 2016, failed to focus on anti-money laundering deficiencies
in the Baltics, despite recurring reports and a Swedish FSA report
indicating such deficiencies.
It said Birgitte Bonnesen, the CEO who served from 2016 through
2019, took significant steps to de-risk the non-resident business
in the Baltics and launched internal investigations.
"However, the CEO did not direct sufficient resources,
attention, or urgency to the remediation of the issues identified,
and did not ensure that information regarding these issues was
shared between relevant Swedbank control functions or with the
management," Clifford Chance said.
"Nor did this CEO ensure that the board was adequately educated
or apprised of the significant legal and reputational risk that
these anti-money laundering deficiencies...presented to
As a result, Swedbank said Monday it had decided to cancel its
severance pay agreement with Ms. Bonnesen but will not make claims
Finally, the Clifford Chance probe identified a number of
employees whose actions or inaction caused or contributed to the
failures. These employees ranged from senior managers to
relationship managers and have subsequently been fired, the bank
Following early findings from the probe, Swedbank recently
notified the U.S. Treasury Department's Office of Foreign Assets
Control of potential sanctions violations regarding $4.8 million of
Last week, the Swedish financial supervisory authority handed
Swedbank a four billion-Swedish kronor ($384.5 million) fine after
finding the lender's Baltic operations had serious deficiencies in
its anti-money laundering measures as well as shortcomings in its
cooperation with the investigation.
The bank said Monday it won't dispute the FSA's decision.
Write to Dominic Chopping at firstname.lastname@example.org
(END) Dow Jones Newswires
March 23, 2020 04:31 ET (08:31 GMT)
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