Poyner Spruill LLP partner Joe Smith recently co-authored a case study with Lee Reiners of Duke Law School, analyzing alleged money laundering violations by the largest financial institution in Denmark.
The case study is intended to be a resource for directors at banks and financial services institutions of all sizes to learn from, and hopefully avoid, mistakes that Danske Bank made in handling this matter. With operations in 16 countries, the bank had a total of 2.7 million personal customers, 211,000 small and medium-sized business customers, and 1,900 corporate and institutional customers. The legal trouble resulted from alleged money laundering in its Estonian branch, and the board and management now face the daunting task of dealing with the fallout.
The bank continues to be subject to multiple legal inquiries, including a criminal investigation by the U.S. Department of Justice.
In September 2018, Danske Bank published a report of its own independent legal inquiry, concluding that nonresident customers had completed transactions totaling roughly €200 billion through the Estonian branch in the period 2007–2015, and that a large proportion were suspicious and potentially illegal money laundering activities. In total, 42 employees were determined to be involved in suspicious activity.
The case study can be read here.
Reiners is the executive director of the Duke Global Financial Markets Center. At Duke Law, he teaches FinTech and the Law, as well as seminars relating to financial policy and regulatory practice. He writes frequently on fintech and other financial regulatory matters on The FinReg Blog.
Smith’s practice at Poyner Spruill focuses on providing legal advice to clients in the financial services industry on matters ranging from regulatory issues to fintech opportunities to litigation settlement monitoring that impacts day-to-day operations. He returned to the firm after serving as the North Carolina Commissioner of Banks for nearly a decade. Smith is a Non-Resident Fellow of the Duke Global Financial Markets Center.