Wednesday, October 28, 2020

Swedbank faces investigation over suspected market abuse

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Swedbank AB, one of Sweden’s biggest banks, is being investigated by the local watchdog for suspected market abuse tied to its broader money laundering scandal.

The Stockholm-based bank, which is still the target of separate investigations in the U.S. and Europe for its laundering affair, said it received notification from the Swedish Financial Supervisory Authority that a new probe was under way, according to a statement on Friday.

Shares in Swedbank fell on the news and traded as much as 5.5% lower, pushing it to the bottom of the Bloomberg index of European financial stocks.

Swedbank said in a separate email that it is aiding authorities and that it is taking steps to prevent any future breaches.

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“We have previously investigated and found deficiencies and shortcomings that are continuously remedied,” spokeswoman Unni Jerndal said. “We have a very ambitious action program for the purpose, and we report on it every quarter.”

The bank, which has already been fined a record 4 billion kronor ($455 million) in Sweden for handling suspicious transactions, said the latest probe covers its conduct between Sept. 20, 2018 through Feb. 20, 2019, and “pertains to disclosure of insider information and the obligation to establish an insider list…in connection with the disclosure of suspected money laundering within the company.”

Swedbank remains the target of multiple international investigations following reports by Swedish state broadcaster SVT that the bank may have allowed more that $100 billion in suspicious cash to flow through its operations.

Elliott Stein, a senior analyst in litigation for Bloomberg Intelligence in New York, said the “risk of fines related to this disclosure issue is likely incremental to its larger money laundering issues. It’s also unclear why Swedish authorities weren’t aware of this issue earlier in their money-laundering probe.” Stein said he and his team “still expect a potential fine in the U.S.”

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In early 2019, Swedbank’s headquarters were raided by the Swedish Economic Crime Authority as part of what was then a preliminary probe into whether the bank breached insider rules. That followed revelations that Swedbank had warned its biggest shareholders that SVT was about to run a critical report, which resulted in a sharp drop in its share price.

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