One of Sweden’s top banks has been dragged into a €135 billion money laundering scandal that has further tainted the European financial sector which has had to deal with a number of financial crimes carried out by EU banks in recent years.
Swedbank has taken a massive blow to its reputation after a recent raid by the Swedish police showed that the bank was involved in major fraud and insider trading.
It doesn’t help that Swedbank is also facing investigation from US regulators for their participation in multiple money laundering schemes
Swedbank will need to prepare to face the consequences which could be very damaging to the bank.
The first casualty has already taken place as CEO Birgitte Bonnesen has been fired from her position and replaced temporarily by CFO Anders Karlsson. Probes and investigations into the bank’s actions are also underway.
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There are already questions about why the bank took so long to respond to the money laundering accusations and why it ignored the warning signs, given the fact that Danske bank has taken heat for money laundering in 2018. The damage is done though as Sweden’s banking reputation has been hurt and further compounded by the fact that some of the top financial regulators in Sweden have close ties to senior management at Swedbank.
Swedbank representatives are saying that the bank will try its best to regain the trust it has lost. They also apologized for the tone that Swedbank had in its recent responses in the past few weeks when it was under fire.
Swedbank Shares Suspended From Trading
The firing of Bonnesen comes after the revelation that the New York State Department of Financial Services was probing Swedbank’s links to the already disgraced Danske Bank and others involved in a wider money-laundering scandal. Documents also surfaced that revealed €135 billion of high-risk non-resident money was funneled through the Swedbank’s Estonian operations from 2008 to 2018.
A lot of the money was traced back to Russia. Local media channels show a trail where some of the payments were linked to both Ukraine’s former president Viktor Yanukovich and Donald Trump’s former campaign director Paul Manafort.
Swedbank’s involvement in this scandal has already done damage to its stock. Stock prices have dropped by 3.7 percent due to these money laundering allegations and things got worse after for investors after the financial regulator has suspended Swedbank shares from being traded as of now.