(Bloomberg) -- New York’s financial regulator is asking two Nordic banks for detailed information about their transactions with Danske Bank A/S as part of a burgeoning investigation into global money laundering, according to a person familiar with the matter.
The two banks, Nordea Bank Abp of Finland and SEB AB of Sweden, must also give New York’s Department of Financial Services more information about their work with Mossack Fonseca & Co., a law firm that set up tax shelters for wealthy individuals around the world, the person said, citing letters to the banks dated Thursday.
The broad request for information came the same day that Swedbank AB’s chief executive officer was fired after investors said she had played down the seriousness of the bank’s exposure to the scandal. The bank also reportedly withheld information from regulators, including the DFS.
There’s no indication that Nordea or SEB are a target of the investigation. But the DFS letters, as described by the person familiar with them, suggest that the regulator wasn’t satisfied with the information it received after a similar request in February.
A spokesman for the DFS declined to comment. In an emailed comment sent by spokeswoman Afroditi Kellberg, Nordea said it’s cooperating closely with authorities “in all the countries where we operate.”
“Combating financial crime is part of our daily operations,” Nordea said. “In cases where we see suspicious transactions, we report it to the authorities for them to take forward.”
A spokesman for SEB in Stockholm said the bank was working on a comment.
Shares of SEB fell about 7 percent on Thursday on fears that the bank would be drawn into the scandal. Nordea slipped about 2.5 percent.
SEB’s chief executive officer, Johan Torgeby, said this week that his bank had “found no indication” that “we have systematically been used for money laundering.” Still, Torgeby said, “I can never guarantee that we have never been the victim of a financial crime or money laundering.”
Revelations that Danske Bank helped move much of $230 billion in mostly Russian money to the Western banking system has broadened into one of the biggest money-laundering scandals in history. As authorities have dug into the matter, other banks in the region have come under scrutiny.
The DFS’s letters in February focused on Mossack Fonseca, whose secret files about wealthy clients were stolen and leaked on a mass scale in 2015. The new letters, according to the person familiar with the matter, also seek information about the banks’ dealings with FBME Bank Ltd., an institution with operations in Cyprus and Tanzania that was cut off from the U.S. financial system in 2017 and subsequently closed.
In addition to these connections, DFS told Nordea and SEB to supply it with information about transactions with Moldindconbank SA, a Moldovan lender; Trasta Komercbanka A/S of Latvia; and ABLV Bank A/S, a private bank in Riga that decided to liquidate last year after the U.S. sanctioned it for doing business with North Korea.
The DFS also asked about connections with Ukio Bankas of Lithuania, a defunct lender linked in news reports to a Russia-based money-laundering operation known as the Troika laundromat.
Although the DFS has regulatory authority only over banks licensed by the state of New York, many global lenders base their dollar-clearing businesses in Manhattan, allowing DFS to project its regulatory power around the world.
- How Dirty Russian Money Swamped Europe’s Banks: QuickTake
- Swedbank $10 Billion Laundering Case Raises Specter of Big Fines
(Adds comment from Nordea.)
--With assistance from Niklas Magnusson.
To contact the reporter on this story: Greg Farrell in New York at firstname.lastname@example.org
To contact the editors responsible for this story: Jeffrey D Grocott at email@example.com, David S. Joachim
©2019 Bloomberg L.P.