Danske Bank legal issues to deepen

The impact of the Russian Laundromat scandal continues to damage the reputation and finance stability of Danske Bank as investigations and legal proceeds keep piling up while share price loses about 50% of market value since the beginning of the scandal.

US, France, Estonia, Denmark and other jurisdictions have already launched formal proceeds against the Bank while other supervisors confirmed ongoing investigations and announced potential charges.

In addition, a class action was set in the first quarter of 2019 by shareholders and investors claiming that the bank failed to communicate about the nature and extend of the issue.

The class action pointed out that as early as 2014, top management was aware of the situation and preferred to continue with its policy of super profits rather than tackle the issue and take corrective measures.

The investigations showed that the compliance culture of the back failed given the tone set at the top for non-compliance.

The class action included the fact that the bank failed to act and communicate upon a whistleblower report from 2013 showing the situation, making that the financial information provided to the public and the financial statements of the bank were materially false and misleading investors.

Other reports showed that Estonian and Danish authorities were aware since 2007 when Russian authorities communicated suspicion.

The class action is one of the first actions taken against a bank by investors for regulatory matters, and includes blaming the bank for engaging in illegal activities to create the share value.

Other civil actions may occur in Europe and Asia as such investors were in similar position while the existing action serves American based investors only.



Jaime Prieto

Mr. Jaime Prieto is a lawyer experienced in Financial Crime, Anti-Money Laundering and Counter Terrorism Financing having extensive professional experience in both public and private sectors. Mr. Prieto has been a Head of Compliance in the European Union, the Americas and the Caribbean for banks, trust companies, asset managers, Big Four audit and advisory firms, RegTechs, government agencies and other types of financial professionals. In addition to his experience, he has been legal and educational chair in several compliance and sectorial organisations and performed as a teacher and speaker for a number of organisations and in several local and international forums. Furthermore, Mr. Prieto is an experienced Money Laundering Reporting Officer anda Data Protection officer with additional experience in risk management.
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