Swedbank money laundering scandal draws in BlackRock, Vanguard

Jonathan Boyd
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Swedbank money laundering scandal draws in BlackRock, Vanguard

BlackRock and Vanguard may be among the 15 biggest shareholders in Swedbank under investigation by the Swedish Economic Crime Authority (Ekobrottsmyndigeheten), following press reports that this group of investors benefitted from insider information linked to a money laundering scandal that has engulfed the financial group in the past week.

Ekobrottsmyndigeheten confirmed in a press statement on 27 February that its lead prosecutor Thomas Langrot has decided to start an investigation into Swedbank on suspicion of unauthorised dissemination of insider information.

This follows publication of an article in Swedish newspaper Dagens Nyheter that Swedbank's biggest shareholders were given advance information about the money laundering scandal and allegations therein, which were highlighted in Swedish current affairs television programme Uppdrag granskning last week.

The programme came about after Swedbank had publicly said it would not be drawn into the Danske Bank money laundering scandal. But SVT, the Swedish television channel that carried the programme, suggested that Swedbank itself had been engaged in facilitating money laundering for over a decade. (The programme can be watched here: https://www.svtplay.se/video/21170803/uppdrag-granskning/uppdrag-granskning-sasong-20-avsnitt-21 )

According to the allegations aired by SVT, some SEK40bn (€3.8bn) was funneled by 50 customers through Swedbank's Baltic branch between 2007-15. These customers exhibited clear indications of money laundering, SVT alleged on the basis of what it says are secret documents and files that show transactions between Danske Bank and Swedbank in the Baltic. 

Langrot said in a statement: "I have on my own initiative started an investigation as there is cause to believe that unauthorised dissemination of insider information was made to the 15 biggest owners in Swedbank before the broadcast on SVT. The ongoing investigation will reveal which information has been handed over."

According to Swedbank's own list of its largest shareholders as of 31 December, available on its website, this includes a number of the biggest insurers, pension providers and banks in the Nordic region. It also includes asset management firms such as BlackRock, Vanguard and SEB Fonder. Collectively the top 10 shareholders own close to 45% in the business.

10 largest shareholders A shares Holding %
Sparbanksgruppen* 119 398 654 10.55
Folksam 78 773 813 6.96
Alecta Pensionsförsäkring 55 019 300 4.86
AMF Försäkring & Fonder 54 816 076 4.84
Swedbank Robur fonder 54 431 770 4.81
Sparbanksstiftelser - ej Sparbanksgruppen 38 314 232 3.38
BlackRock 29 477 845 2.6
Vanguard 29 071 717 2.57
Norges Bank 23 383 642 2.07
SEB Fonder 23 169 768 2.05
10 largest shareholders 505 856 817 44.69

(Source: Euroclear to 31 December 2018)

Swedbank president and CEO Birgitte Bonnesen called in EY on 21 February to conduct an external investigation into the allegations raised by the television report.

However, on 26 February, the group announced that EY would be replaced by Forensic Risk Alliance in conducting the investigation, although the requirement still stood for a report on the results of the investigation being delivered to the CEO and board of directors no later than the Annual General Meeting, scheduled for 28 March, before it is presented "to other stakeholders".

 

Jonathan Boyd
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Jonathan Boyd

Editorial Director of Open Door Media Publishing Ltd, and Editor of InvestmentEurope.