The Scandinavian
lender giant Swedbank announced last week that the U.S. Securities and Exchange
Commission (SEC) has
closed its six-year investigation into the bank’s operations without
taking enforcement action, eliminating one of three ongoing American
probes related to alleged money-laundering violations.
SEC Closes Swedbank
Money-Laundering Probe After Six Years
The SEC
investigation, which began in 2019, examined the bank’s past failures in
anti-money laundering and counter-terrorism financing controls, along with
problems in how Swedbank disclosed information about its Baltic
operations.
“We
are placing another investigation of historical shortcomings behind
us,” Deputy Chief Executive Officer Tomas Hedberg said
in a statement.
While the
SEC closure removes some legal uncertainty, Swedbank still faces
investigations by the U.S. Department of Justice and New York’s Department
of Financial Services. The bank said yesterday (Sunday) it cannot predict the
financial impact of these remaining probes or estimate when they might
conclude.
Sweden’s
second-largest bank by market value has already paid heavily for its compliance
failures. Swedish authorities imposed a 4 billion kronor ($426 million)
fine in
2020 for violating anti-money laundering rules.
The
remaining U.S. investigations could prove even more costly.
Bloomberg Intelligence analyst Philip Richards estimated earlier this
year that monetary fines could reach around $386 million, matching what
the bank paid to Swedish regulators. However, he cautioned that penalties
could climb closer to $1 billion if structured similarly to the $2 billion
settlement Danske Bank agreed to in 2022.
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Baltic Operations Under
Scrutiny
The
investigations center on Swedbank’s
operations in the Baltic states, where the bank became entangled in a
massive money-laundering scandal that also engulfed Denmark’s Danske
Bank. Regulatory scrutiny intensified after reports surfaced
about suspicious transactions flowing through the banks’
Estonian branches.
The SEC
probe specifically focused on whether Swedbank adequately disclosed
information about its Baltic operations to investors and regulators. The
investigation examined the bank’s compliance with U.S. securities laws
regarding transparency and investor communications.
In response
to the announcement, the bank’s shares on Nasdaq Nordic rose more than 2.7
percent on Monday, opening with an upward gap on the chart and testing the
level of SEK 273.3 per share.
This article was written by Damian Chmiel at www.financemagnates.com.
