Swedbank DFS settlement brings $50mn New York penalty
New York’s DFS said Swedbank will pay $50mn to resolve claims tied to a Panama Papers-era compliance investigation.
By Rafael Ortiz · Fintech Correspondent
· 3 min read
The Swedbank DFS settlement requires Swedbank AB and its New York branch to pay a $50 million penalty after New York’s banking regulator alleged the bank withheld information from investigators. The Swedish lender said the agreement ends all investigations into what it described as historical shortcomings, removing a long-running regulatory matter linked to anti-money laundering controls and disclosures.
The New York State Department of Financial Services said in a July 16 press release that the settlement resolves its investigation into Swedbank’s compliance with New York banking law. DFS said that inquiry was prompted by the 2016 Panama Papers leak and also covered the bank’s failure to cooperate fully with information requests during the investigation.
Acting Superintendent Kaitlin Asrow said in the DFS release that financial institutions must follow New York laws and rules designed to protect the integrity of the financial system. She said the department holds institutions accountable for meeting those obligations and for cooperating with its oversight.
What is the Swedbank DFS settlement?
The settlement is an agreement with the New York State Department of Financial Services under which Swedbank AB and its New York branch pay a $50 million penalty. According to Swedbank’s July 16 release, the matter covers the bank’s failure to disclose information to the authority on two occasions, in 2016 and 2018.
Swedbank said investigations that began in 2019 were carried out in the United States, Sweden and Estonia. The bank said those investigations addressed its work to prevent money laundering and terrorist financing, as well as disclosures of information between 2007 and 2019.
The Panama Papers leak in 2016 triggered scrutiny of financial institutions and offshore structures across several jurisdictions. In Swedbank’s case, DFS said the leak led to an examination of whether the bank complied with New York banking law and whether it responded fully to the department’s demands for information.
Swedbank framed the DFS agreement as the final step in a series of official reviews. Göran Persson, chairman of Swedbank’s board, said in the bank’s release that all investigations into historical shortcomings had been concluded and that the bank could focus on customers, developing the business and delivering shareholder value.
Jens Henriksson, Swedbank’s president and chief executive, said in the same release that the DFS investigation involved conduct from almost a decade ago and that the bank could now put it behind it.
How did the earlier Swedbank investigations develop?
Reports in March 2019 said DFS had told Swedbank the previous month that it was examining seven cases at the bank following money laundering scandals. On the same day as that report, Swedish prosecutors raided Swedbank, according to the account cited by PYMNTS.
The raid followed disclosures that Swedbank had handled money from non-residents in high-risk countries, mainly Russia, through its Estonian branch over the previous 10 years, according to the same account. Swedbank’s July 16 statement said the broader investigations into conduct across the United States, Sweden and Estonia have now been concluded.
DFS’s announcement is available on the New York State Department of Financial Services website. Swedbank’s statement is available through the bank’s press release.
This story draws on original reporting from PYMNTS.
