Former Top Banking Regulator Charged for Danske Money Laundering: FT
14 May 2019

Danish prosecutors have charged the former chairman of Denmark’s Financial Supervisory Authority (FSA) in connection with Danske Bank’s €200 billion money laundering scandal, the Financial Times reported.

Law enforcement officials indicted Henrik Ramlau-Hansen, and raided his home, over allegations that the former FSA chairman failed to prevent illicit transactions while serving as Danske Bank’s finance director from 2011 to 2015, according to the newspaper, which cited multiple unnamed sources and a report by Danish media outlet Borsen.

Ramlau-Hansen served as the FSA chair from 2016 to 2018, and resigned on the same day that the authority issued a critical report on Danske’s role in the money laundering scandal, from which he had recused himself, the Financial Times said.

According to documents obtained by the newspaper, Ramlau-Hansen was present in an October 2013 meeting of Danske executives in which attendees were informed that the institution’s portfolio of non-resident clients in Estonia was larger than that of its rivals and should potentially be reduced.

In response to recommendation, then-CEO Thomas Borgen suggested speaking of the matter in another forum and recommended that the bank find a “middle ground” to address the concerns, according to the report.  Individuals familiar with the Danish investigation believe the meeting marked a critical juncture in which Danske Bank could have stopped the money laundering scandal, the Financial Times said.

News of the indictment shortly follows the disclosure that Danish authorities separately indicted Borgen as well as nine other former Danske managers in connection to the scandal, which centers on Russia-linked transactions processed in the institution’s Estonian branch between 2007 and 2015.

Last week, the bank announced that it had tapped ABN Amro banker Chris Vogelzang to become its new chief executive and Morgan Stanley’s Satnam Lehal to lead its financial crime unit.

The bank’s money laundering troubles are unlikely to disappear anytime soon. EU officials are questioning the decision by the European Banking Authority last month to reject an internal report that faulted supervisory authorities in Denmark and Estonia for failing to prevent Danske’s regulatory lapses.

As a result of the scandal, the financial institution revised its outlook for 2019, noting that it remained the subject of at least four ongoing criminal probes and at least two class-action lawsuits filed by shareholders claiming that poor anti-money laundering compliance controls and a lack of transparency by Danske managers led to investment losses.

Read more:

Supervisors ignored Russian warnings over money laundering at Danske – document

Ten former Danske Bank managers charged over Estonia case: Berlingske

Danske Bank Hires Morgan Stanley Director to Lead Financial Crime Unit

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