In a significant legal development for the Nordic banking industry, former Swedbank CEO Birgitte Bonnesen has been found guilty of gross fraud by the Svea Court of Appeal in Sweden. Her case has drawn considerable attention, not only for its implications on corporate governance and accountability, but also for its spotlight on money laundering practices within the banking sector.
In 2018, the Danske Bank scandal came to light, revealing that approximately EUR 200 billion in suspicious transactions had flowed through the bank’s Estonian branch between 2007 and 2015. Despite the scope and severity of the Danske Bank scandal, no Danske Bank executives were criminally prosecuted, and no executives have been found liable for the losses suffered by investors in Danske Bank yet. (For more information on this case and Deminor’s involvement, please see here: Danske Bank). Nonetheless, the Danske Bank scandal raised alarms about inadequate controls and the potential for systemic issues in the region’s banking sector.
In February 2019, reports surfaced alleging that Swedbank had processed large amounts of suspicious transactions, particularly those connected to clients in the Baltic States. Serious questions were raised about the bank's anti-money laundering protocols and its responsibility to inform stakeholders adequately.
In 2020 Swedbank was fined SEK 4 billion (USD 386 million) by the Finansinspektionen (the Swedish equivalent to SEC/FSA), for serious deficiencies in its anti-money-laundering work and for having withheld information from authorities.
Birgitte Bonnesen served as the CEO of Swedbank from 2016 to 2019 during a tumultuous period marked by allegations of extensive money laundering activities linked to the bank's operations in Estonia. Over 2018 and 2019, Swedbank’s stock price declined by approximately 35% as the scandal unfolded.
In 2022, Birgitte Bonnesen was charged by the public prosecutor’s office under three main allegations: gross fraud, gross embezzlement, gross market manipulation. A fourth lesser allegation for having revealed insider information was also included. The charges are very rare, and never before had the CEO of a major bank been on trial for such criminal offences.
Birgitte Bonnesen was acquitted of all charges in 2023 by the first instance Stockholm district court. In 2023 the case was appealed to the Svea Court of Appeal. The court's decision focuses on two interviews Bonnesen gave to Swedish media in October 2018, just before the release of Swedbank's third quarterly report for that year. In these interviews, Bonnesen made statements regarding the bank’s measures to combat money laundering in its Estonian branch. The court concluded that her reassurances were misleading and could have materially affected investors' perceptions of the bank's financial health.
The Svea Court of Appeal determined that Bonnesen’s statements constituted gross fraud and sentenced her to 15 months in prison. The court highlighted that Bonnesen either intentionally or negligently provided false information that was likely to influence investor decisions and harm Swedbank’s reputation and financial standing. While she was acquitted of several other charges, including market manipulation, the conviction on this count demonstrates a growing judicial intolerance for misleading corporate communication. Prosecutors emphasized that her disclosures, or lack thereof, could have had severe repercussions on the bank’s financial assessments by shareholders and the public.
This case raises several crucial issues about transparency and ethical responsibilities within the banking sector. As financial institutions become increasingly involved in global markets, the scrutiny of their internal processes, particularly regarding anti-money laundering measures, is more critical than ever. The ruling sets a precedent that could influence how executives communicate with investors and the public, balancing corporate messaging with the need for honesty and transparency. It serves as a stark reminder for bank leadership to prioritize compliance and integrity, not just in practice but also in how they convey that commitment externally.
The case has been appealed to the Supreme Court. As the legal proceedings continue, the implications of this ruling will likely resonate through financial institutions, shaping policies and practices around corporate governance and compliance in the years to come. This landmark ruling serves as a wake-up call for Swedish financial institutions: transparency, accountability, and ethical communication are not just legal obligations but fundamental principles for sustaining trust in financial markets.
For more information on the developments of collective securities litigation in the Nordic countries, please read the following article by our Counsel Scandinavia, Mats Geijer: Securities Litigation: A Growing Space in Scandinavia.
