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Sweden’s economic crime watchdog is pressing charges against former Swedbank chief executive, Birgitte Bonnesen, as a consequence of what it deems misleading claims following anti-money laundering (AML) failings in Estonia.
The fallout from Baltic AML scandal continues to widen as confirmed by the latest actions taken by Sweden’s prosecutors.
Charges have now been brought against Swedbank’s former CEO, which Sweden’s authorities have described as: “foremost, gross fraud, and secondly gross market manipulation.”
According to chief prosecutor Thomas Langrot, the former CEO of the bank intentionally or through gross negligence, among the public or the company's stakeholders, distributed misleading information about the bank's measures to prevent, detect, and report suspicions of money laundering in Swedbank's operations in Estonia.
These indiscretions allegedly took place in October 2018, and January and February of the following year.
The case relates to a scandal that erupted when several European media platforms revealed major money laundering failings in Swedbank’s Estonian branch.
High-risk clients with the bank were able to transfer over $40 billion through its Baltic operations between 2014 and 2019 according to an investigation from law firm Clifford Chance - commissioned by the Swedbank’s new executive board.
“The most important effect is the large price drop for the Swedbank share after the revelations,” said Langrot, pointing out that misleading information had given a false impression that Swedbank did not have or had problems with the AML processes in the bank's operations in Estonia during the years 2007 - 2018.
The authority claims that this was able to happen in spite of the fact that the former CEO had knowledge of unpublished information about extensive and serious shortcomings regarding the AML processes and also information about extensive suspicious transactions and customers from a money-laundering perspective in the Estonian office.
Bonnensen, a Danish national, has also been accused of a blackout, hiding evidence of failings from Swedbank’s shareholders, which include the private equity giant, Blackrock, as well as Norway’s central bank.
The former CEO also faces charges relating to insider information. In one incident, Prosecutors argue that she intentionally disclosed inside information about the content of an upcoming television programme. This was broadcast by Sweden’s public broadcaster in February 2019, and made allegations of AML failings.
This allegedly took place at a meeting on 18 February 2019 where representatives of the largest shareholders in the bank participated, said Langrot.
Bonnensen’s prosecution is a continuum of bad publicity surrounding Sweden’s retail banking giant. In March 2020, it was hit with a record fine of $386 million from Sweden’s financial watchdog due to its AML failings.
Swedbank’s run-ins with the law draw parallel to Danske Bank - who oversaw similar AML breaches in Estonia.
Around €200bn of suspicious transactions flowed, via the Estonian branch of the Danish banking giant, from sources in Estonia, Russia and Latvia in a time period spanning 2007 until 2015.
The scandal led to the bank being exiled from the Baltic state, and its then chief executive, Thomas Borgen, was forced to resign before facing criminal proceedings from the Danish authorities.
