Swedbank puts papers seized by prosecutor in sealed envelope
A legal firm hired by Swedbank to defend it amid growing allegations of money laundering has accused the prosecutor investigating the case of ignoring the norms of Swedish law.
Swedbank said on Sunday it is using Nordia as its external legal counsel to handle a criminal investigation that focuses on potential fraud. The probe is related to a larger set of claims alleging that the Stockholmbased lender was used to launder vast sums of money from the former Soviet Union.
Last week, Swedbank fired CEO Birgitte Bonnesen as allegations against Sweden’s oldest bank and biggest mortgage lender piled up. Swedbank is being investigated by the financial supervisory authorities of Sweden and Estonia, as well as by authorities in the US, amid claims that it was part of the $230bn Danske Bank Estonian scandal. Swedbank’s share price has plunged by about a third since the case first erupted on February 20.
Swedbank published a statement by Nordia on Sunday, in which it challenged the prosecutor’s assessment in Swedish media that the lender had hindered the investigation.
In its statement, Nordia said that allegations by the prosecutor that Swedbank “has not cooperated during the search in the desired way, but to the contrary has hampered the search by not waiving the attorney client privilege and the confidentiality” is “completely incorrect and incomprehensible”.
According to Nordia, “it was pointed out that information covered by attorney client privilege cannot be seized”. The law firm said that the prosecutor’s subsequent decision to seize the documents is “in direct conflict with Swedish law”.
Swedbank has, on Nordia’s advice, placed the documents in question in a sealed envelope that has been marked to make clear that the material is subject to attorney client privilege, the law firm said.
The money laundering case surrounding Swedbank reached fever pitch last week, making the CEO’s continued presence untenable.
Amid media allegations that its management had misled US authorities, Swedbank’s headquarters were raided on Wednesday by Sweden’s Economic Crime Authority as part of an investigation into a potential breach of rules on insider information.
On the same day, after markets closed, the public learned that the Economic Crime Authority was also investigating Swedbank for fraud, following what appeared to be misleading statements by the CEO.
Some of Swedbank’s biggest investors have since signalled that they are not satisfied with the board’s handling of the case, suggesting that the CEO’s head may not be the last to roll.
MATERIAL COVERED BY ATTORNEY CLIENT PRIVILEGE CANNOT BE SEIZED. THE ORDER IS IN DIRECT CONFLICT WITH SWEDISH LAW
In the case of Danske, the chair was ejected by the bank’s biggest shareholder about a month after CEO Thomas Borgen was removed.
Since then, Danske’s share price has stabilised.
The Swedbank moneylaundering scandal has been complicated by the apparent attempts to mislead the public as to the seriousness of the case.
A report published by broadcaster SVT last week alleged that Swedbank may have been used to launder more than $100bn between 2010 and 2016. That followed allegations that those who benefited from the bank’s services included deposed Ukraine president Viktor Yanukovych and former Trump campaign chairman and convicted felon, Paul Manafort.