News

A Swedish court on Wednesday cleared Swedbank’s former chief executive Birgitte Bonnesen of deceiving investors in 2018 and 2019 amid allegations that the lender’s affiliate in Estonia handled large volumes of suspicious funds.

Following weeks of hearings described in the local press as Sweden’s “trial of the century,” a panel of two judges at Stockholm District Court found Bonnesen, 66, not guilty of fraud nor market manipulation after reviewing statements she made to the press about Swedbank Estonia’s anti-money laundering program.

Bonnesen’s comments on the affiliate at times appeared “somewhat misleading” but did not rise to the level of fraudulent misrepresentation, the judges ruled. “The statements have either been correct, and/or too general to reach the [standard of] criminal liability.”

The judges further ruled that Bonnesen, who has consistently denied wrongdoing in the year since Swedish prosecutors filed criminal charges against her, could not be held liable for any headlines chosen by news outlets that may have misrepresented her position.

Bonnesen was also cleared Wednesday of disclosing insider information by telling shareholders near the end of her three-year tenure in February 2019 that Swedish broadcaster SVT would soon report that Swedbank Estonia handled thousands of payments tied to the scandal-plagued, now-defunct Danske Bank Estonia.

Swedbank’s share values plunged in the days after the program aired.

The case against Bonnesen, who led Swedbank during the most turbulent period in the lender’s 203-year history, marked the first prosecution of a senior executive of any Nordic or Baltic lender involved in any one of a series of high-profile money laundering schemes that have come to light in Estonia, Latvia and Lithuania over the past six years.

Prosecutors alleged that Bonnesen committed fraud and market manipulation on four separate occasions in late 2018 and again in early 2019 by intentionally or negligently making misleading statements about Swedbank Estonia in claiming that the affiliate did not have any significant current or historic AML-related deficiencies.

One of those statements occurred in October 2018, when Bonnesen told Svenska Dagbladet that a confidential, in-house assessment of Swedbank’s exposure to suspicious clients of Danske Bank Estonia, which had just then admitted to handling more than €200 billion in potentially illicit funds, showed “nothing” in the way of warning signs.

Prosecutors alleged that Bonnesen, who led Swedbank’s Baltic portfolio from 2011 to 2014, already knew by that point that hundreds of opaque entities had moved billions of dollars through corporate accounts in Estonia over nearly a decade.

But the judges ruled Wednesday that Bonnesen made her comments to Svenska Dagbladet and other news outlets in the present tense and spoke too generally to meet the criminal threshold.

They also ruled that her subsequent claim to the Swedish newspaper that Swedbank never served the customers of Danske Bank named by SVT was accurate.

Accountability

The Swedish Financial Supervisory Authority fined Swedbank a record €360 million in March 2020 for systemically and egregiously violating AML requirements in Estonia and Latvia, as well as back home in Sweden. Swedbank also failed to cooperate fully with regulators at home and in the Baltics during their investigation, the FSA noted.

Wednesday’s decision to acquit Bonnesen stands in contrast to the findings of a Swedbank-commissioned internal review by global law firm Clifford Chance that the lender published in the days following the fine.

Clifford Chance concluded that “certain disclosures” Bonnesen made during the relevant period concerning Swedbank’s historic and current AML controls—and also about the lender’s exposure to clients and transactions tied to Danske Bank—”were either inaccurate or failed on multiple occasions to provide sufficient clarity and context.”

The law firm found that Swedbank Estonia handled €21 billion of suspicious payments from 2014 to 2019, while Swedbank Latvia and Swedbank Lithuania together processed around €15.5 billion of potentially illicit funds.

Prosecutors did not charge Bonnesen for any AML violations that occurred on her watch at Swedbank. Still, her acquittal will do little to counter the view that pursuing criminal liability against senior executives for compliance-related failures is a nonstarter.

“It sends a very underwhelming message to AML professionals who spend long hours monitoring transactions and flagging suspicious activity,” Samantha Sheen, former AML director for ACAMS, told moneylaundering.com. “They’ll conclude that it doesn’t matter how hard you try, people at the top are never held accountable.”

Board members forced Bonnesen to resign in March 2019 as the pressure reached the boiling point at Swedbank, which is still the target of a criminal investigation in Estonia for alleged violations that occurred from 2014 to 2016.

Several other former senior employees of Swedbank Estonia also reportedly face the prospect of AML-related criminal charges in the Baltic nation, as do 19 former employees of Danske Bank Estonia.

In April 2021, Danish prosecutors dropped money laundering charges against Danske Bank’s former chief executive Thomas Borgen, former financial executive Henrik Ramlau-Hansen and former business banking director Lars Stensgaard Morch.

Eight executives of ABLV, which collapsed in February 2018 after U.S. officials accused the lender of enabling illicit finance on a massive scale, face trial this year for allegedly helping clients from Russia and other former Soviet states launder vast sums.

Bonnesen’s attorney did not respond to a request for comment.

Contact Koos Couvée at kcouvee@acams.org