Institutional Investors Launch $475m Lawsuit Against Danske Bank

Grant & Eisenhofer (GE) released a statement on Monday announcing that it is suing Danske Bank for $475 million.

The US legal firm says that it is representing a mix of institutional investors from 19 different countries.

Their claims against Danske Bank stem from a money-laundering scandal that has engulfed the Danish firm over the past twelve months.

An Estonian subsidiary of the banking group allegedly laundered $230 billion between 2007 to 2015.

The bulk of the money is thought to have come from Russia and other countries that made up the former Soviet Union.

Given the gargantuan volumes of cash that are thought to have been siphoned through the Tallinn-based bank, it is believed that it could be the largest Money Laundering Money Laundering Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Read this Term scandal in European history.

"Shocking concealment of criminality"

In their lawsuit, GE says that Danske Bank’s leadership were aware that money laundering was taking place as far back as 2013.

The law firm said senior figures at the bank attempted to cover up what had happened.

“The real scandal isn’t about a small foreign bank branch going rogue – it’s about the shocking concealment of criminality that went straight to the top of the enterprise,” said Olav Haazen, a lawyer with GE.

“Danske Bank’s management engaged in a concerted cover-up of its enormous money laundering exposure, while continuing to paint a rosy picture to investors.”

Those investors are likely peeved at the massive hit which Danske Bank took after the money laundering allegations went public.

According to GE, investors lost $9 billion, and Danske Bank’s share price halved when details of its Estonian branch’s activity went to press.

This is not the first time GE has sued a major bank for misconduct on behalf of investors.

After the financial crisis a decade ago, the law firm won $1 billion from Dutch bank Fortis and $1.5 billion from the Royal Bank of Scotland. Both cases pertained to the two banks’ understating how exposed they were to the US subprime mortgage market.

GE also gained some press a week ago when it announced it was suing Tesla’s CEO Elon Musk to prevent him from tweeting about the car manufacturer.