Swedbank Faces US Investigation As Bank Acknowledges Money Laundering Mistakes

Sweden’s oldest bank is facing investigations in the United States as it has acknowledged it hasn’t done enough to prevent money laundering.

Swedbank is already facing a joint investigation conducted by financial watchdogs in Sweden and the Baltics, as well as another probe by Sweden’s economic crimes body.

The bank is involved in a regional money laundering scandal that started with Danske Bank, which admitted last year that 200 billion euros ($223 billion) of suspicious funds moved through its Estonia branch between 2007 and 2015.

A separate report by Swedish broadcaster SVT then revealed that Swedbank processed transactions worth up to 20 billion euros a year from high-risk clients, mostly Russian, through its Estonian branch from 2010 to 2016.

While the lender had repeatedly denied shortcoming in its anti-money laundering (AML) procedures, acting CEO Anders Karlsson admitted on Thursday (April 25) that previous internal investigations have proven those statements to be false. Specifically, the probes showed weaknesses in know-your-customer procedures, as well as a lack of reports to authorities on suspicious transactions.

“For Swedbank to deserve the trust of customers, authorities, investors, employees and other stakeholders, continuous improvement in our anti-money laundering work is required,” Karlsson told reporters, according to Reuters.

The CEO of Alecta, the lender’s third biggest investor, praised the news.

“Swedbank is being transparent, cooperating with the authorities and working to restore trust, which is necessary and positive,” Magnus Billing told the news outlet.

In the meantime, the bank is facing an investigation by the New York State Department of Financial Services (DFS), which alerted Swedbank in a letter in February that it was looking into seven different cases at the bank.

The letter stated that it has engaged in several inquiries related to Swedbank and its ties to money laundering scandals, including those at Danske Bank, Latvia’s ABLV, Cyprus’ FBME Bank and Lithuania’s Ukio Bank. It is also looking at its ties to Mossack Fonseca, the law firm at the heart of the Panama Papers.

“From our review of the production, it appears that this response may be incomplete, as it does not appear to apply to ‘the global operations of Swedbank,’ and instead excludes responsive information relating to parents, subsidiaries or other affiliates of Swedbank,” stated the letter, which was signed by the DFS’ Deputy Superintendent for Enforcement Megan Prendergast Millard.