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.