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Swedbank Money Laundering Case
Swedbank, one of the oldest banks in Sweden came into the global financial limelight with reasons of money laundering allegedly orchestrated by its administration. On February 2019 the local broadcaster SVT in Sweden un-earthed the most horrifying money laundering scandal in the banking history. The suspicious transaction findings confirmed by Estonian authorities revealed how the amount was transferred through Danske bank which is now on the investor’s radar. Apparently, countries such as Britain, the US, Estonia, Britain Denmark and France have a joint collaboration to un-earth the masterminds of these vice (Younas, Arshad and Hasina, 2012)
The investigation showed that between the years 2007 to 2015, at least 40 billion Swedish crowns had been transacted in accounts between Danske and Swedbank in the Baltics. The action took a toll order on its operation resulting into massive financial loss as well as its image being tainted. Besides, the financial giant saw many of its administrators fired. In March 2019, its chief executive officer Birgitte Bonnesen was fired followed by unprecedented resignation of its chairman Lars Idermark a month later.
Estonia, one of the investigations state revealed that it is dealing with the most sophisticated case ever to be graced in its law courts. This comes in the wake of the information that Danske and Swedbank were allegedly used as pipelines to swindle and funnel billions of dollars into the west. Daske risks liquidation as it ponders on the move to exit from Estonia based on the financial supervisor orders. According to the Swedbank management, the ongoing investigations into the money laundering scandal has revealed that so far there was no indication of criminal activities in the company. It however remains to be seen what the investigators will come up with considering that due court processes has to be followed.
To further dig dip into the occurrence of the money laundering case, Clifford Chance law firm was given the mandate to conduct investigations. The move was also supported by the involvement of forensic experts from FTI and FRA (Pellegrina, Lucia, et al. 2017). So far Swedbank has received the report consequently putting it on the website. The report underlines the banks effort to handle both internal and external information as far as the case is concerned. The law firm investigation include money transaction activities that allegedly took place between 2007 and March 2019.
Vulnerabilities of Banks to Money Laundering
Financial firms especially banks face high risks of its money being swindled on so many fronts. Majority of this vice is engineered by organized criminal gangs, internet gangs and in-house theft. The syndicate is characterized by a complex web characters, domestic payments, businesses, oversees wires who which makes banking sectors more vulnerable to money laundering. Besides, the low-level individual will deposit small amount of money while keen in making sure that they are not detected. When the amount reaches a certain volume level, organized criminals channel these aggregated monies overseas. It is a complex move aimed at frustrating investigations and suspicions (Bjerregaard, Elisabetta, and Tom 2019). In the end, banks find it difficult to follow up transactions monitoring systems thus incurring unnecessary losses. The use of annalistic has not helped much either. It seems to be conducted on a thin line of data hence leaving huge data transaction activities exposed to the criminal gangs.
In conclusion, since money laundering allegations came to the fore in February 2019, Swedbank is on the record repeatedly distancing itself from the theft syndicate. However, it has remained loyal to the investigation authorities. In addition, it narrates that all allegedly suspicious money transfers were reported to the authorities but still remain optimistic that justice will be served in the law courts.
Works sited
Bjerregaard, Elisabetta, and Tom Kirchmaier. “The Danske Bank Money Laundering Scandal: A Case Study.” Available at SSRN 3446636 (2019).
Pellegrina, Lucia dalla, et al. Vulnerability to Money Laundering and Crime Deterrence: Evidence from Italy. No. 1766. BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita’Bocconi, Milano, Italy, 2017.
Younas, Arshad, and Hasina Jan. The Impact of Service Recovery on Customer Loyalty (Case company: Swedbank). 2012.