The Swedish Economic Crime Authority on Tuesday announced charges against Birgitte Bonnesen, Swedbank’s former chief executive officer, for fraud and market manipulation.
Bonnesen in 2018 and 2019 repeatedly spread misleading information that Swedbank did not have problems with its anti-money laundering (AML) processes in Estonia, said 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“This has happened despite the fact that the former CEO had knowledge of unpublished information about extensive and serious shortcomings regarding the AML processes and also information about extensive suspicious transactions / customers from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.
Langrot added a preliminary investigation found evidence of a cover-up at Swedbank regarding its AML problems.
In March 2020, Swedbank accepted a fine of 4 billion Swedish Krona (then-U.S. $390 million) following findings from an independent investigation carried out by law firm Clifford Chance. The probe determined Swedbank’s Baltic subsidiaries recorded 17.8 billion euros of incoming payments and €18.9 billion of outgoing payments that represented high risks of money laundering from March 2014-19.
Clifford Chance also found Swedbank’s Estonian and Latvian branches “actively pursued” high-risk customers as a business strategy, and Swedbank Estonia took on high-risk customers after they had been offboarded by other banks in Estonia for their risk levels. High-risk customers in Baltic banking were also allowed to open accounts in the bank’s other business areas in Sweden, the investigation found.
The law firm concluded the bank’s AML controls were poorly designed during the entirety of the reviewed period from 2007-19 and that the bank’s CEOs, including Bonnesen, during that time had “a lack of adequate appreciation for the risk posed by the high-risk non-resident customers to the bank.”
Swedbank’s board dismissed Bonnesen in March 2019. She had held the CEO position since 2016. Her severance pay was canceled following the findings of the Clifford Chance investigation.
The market manipulation charges against Bonnesen acknowledge the impact revelations of the AML deficiencies had on Swedbank’s share price.