The Swedish Economic Crime Authority announced charges of fraud and market manipulation against Birgitte Bonnesen, Swedbank's former CEO, on Tuesday.
Bonnesen misled the public in 2018 and 2019 by claiming that Swedbank's anti-money laundering (AML) processes in Estonia were fine, according to Thomas Langrot, chief prosecutor and preliminary investigation leader at the Swedish Economic Crime Authority, in a translated press release.
"This has happened despite the fact that the former CEO had knowledge of unpublished information about extensive and serious shortcomings regarding the AML processes and also information about extensive suspicious transactions / customers from a money laundering perspective in the Estonian business," Langrot said.
A preliminary investigation found evidence of a cover-up at Swedbank regarding its AML issues, according to Langrot.
Swedbank agreed to pay a fine of 4 billion Swedish Krona (then $390 million) in March 2020, following the findings of an independent investigation conducted by law firm Clifford Chance. Swedbank's Baltic subsidiaries recorded 17.8 billion euros in incoming payments and €18.9 billion in outgoing payments between March 2014 and March 2015, according to the investigation.
Swedbank's Estonian and Latvian branches "actively pursued" high-risk customers as a business strategy, according to Clifford Chance, and Swedbank Estonia took on high-risk customers who had been offboarded by other Estonian banks due to their risk levels. According to the investigation, high-risk customers in Baltic banking were also allowed to open accounts in the bank's other business areas in Sweden.
The law firm concluded that the bank's anti-money laundering controls were inadequate throughout the reviewed period, from 2007 to 2019, and that the bank's CEOs, including Bonnesen, lacked "adequate appreciation for the risk posed to the bank by high-risk non-resident customers."
Bonnesen was fired by Swedbank's board of directors in March 2019. She had been the company's CEO since 2016. Following the findings of the Clifford Chance investigation, her severance pay was cancelled.
The charges against Bonnesen for market manipulation acknowledge the impact that the AML weaknesses had on Swedbank's stock price.
By fLEXI tEAM