Danske Bank has been ordered to close its troubled Estonian branch before the end of 2019. Estonian regulators noted on February 19 that the bank violated anti-money laundering regulations for many years by allowing high-risk money-laundering clients to make suspicious transactions through the bank.
In addition, they stated that Danske Bank misled the Estonian public authorities by providing them with inadequate information and thus actually hampered their investigation, according to a statement from the Estonian Board of Financial Supervision.
Danske Bank announced the same day that it is also closing banks in Latvia and Lithuania and Russia.
In a related move, the European Union Banking Authority has opened a formal investigation “into a possible breach of Union law by the Estonian Financial Services Authority and the Danish Financial Services Authority in connection with money laundering activities linked to Danske Bank and its Estonian branch in particular.”
Here’s a roundup of reaction and reporting:
- IRS Whistleblower Attorney Stephen M. Kohn and Executive Director of the National Whistleblower Center represents Howard Wilkinson, the British trader in Danske Bank’s Estonia office who exposed the scandal. Wilkinson raised concerns over the illegal money-laundering scheme in 2013, a tale described in the Wall Street Journal in October 2018.
“This is a lesson to corporate banks. Danske Bank made a grave error when it forced Mr. Wilkinson to sign a restrictive non-disclosure agreement, instead of working with Mr. Wilkinson in trying to fix the problems,” according to a statement from Kohn.