Nasdaq Implements Stressed Market Conditions for Danske Bank Stocks

American Stock Exchange Stock Exchange A stock exchange, also known as a securities exchange or bourse represents is a facility where stockbrokers and traders can buy and sell securities.This includes shares of stock, bonds, exchange-traded funds (ETFs), or other financial instruments. By extension, stock exchanges can also provide facilities for the issue and redemption of such securities and instruments and capital events including the payment of income and dividendsStock exchanges have developed into a permanent fixture in the fin A stock exchange, also known as a securities exchange or bourse represents is a facility where stockbrokers and traders can buy and sell securities.This includes shares of stock, bonds, exchange-traded funds (ETFs), or other financial instruments. By extension, stock exchanges can also provide facilities for the issue and redemption of such securities and instruments and capital events including the payment of income and dividendsStock exchanges have developed into a permanent fixture in the fin Read this Term Nasdaq has had to intervene to stop Market Makers Market Makers Market makers or called dealing desk brokers represent a type of broker that internalize flows and are taking the opposite side of a transaction submitted by their clients. The market making broker is only quoting a feed of prices to its clients. These feeds may or may not be the exact same as the prices quoted on the interbank market.Any order a client enters is processed internally and never goes out to the market, except in rare cases where a market making brokerage identifies a client as a v Market makers or called dealing desk brokers represent a type of broker that internalize flows and are taking the opposite side of a transaction submitted by their clients. The market making broker is only quoting a feed of prices to its clients. These feeds may or may not be the exact same as the prices quoted on the interbank market.Any order a client enters is processed internally and never goes out to the market, except in rare cases where a market making brokerage identifies a client as a v Read this Term from walking away from Danske Bank’s volatile stock. The actions follow the news that the Danish bank is being investigated by US law enforcement agencies in regards to suspected money laundering.

On Friday, Nasdaq put trading of derivatives tied to shares of Danske Bank in a so-called stressed market condition. This means the exchange can allow market makers to provide quotes using wider spreads.

This was the first time the exchange had taken such a measure against the Danish bank, and Mikael Siewertz, product manager at Nasdaq in Stockholm told the Gulf Times that Nasdaq expects similar market conditions today, however, he does think cooler heads may prevail this Monday.

Us Authorities Launch an Investigation into Danske Bank

The volatile stock is in response to rumors that US law enforcement agencies are looking into Danske Bank in relation to money laundering. On Friday, The Wall Street Journal reported that: “The [U.S.] Justice Department, Treasury Department, and Securities and Exchange Commission [SEC] are each examining Danske Bank after a confidential whistleblower complaint was filed to the SEC more than two years ago.”

The bank is accused of facilitating an estimated $150 billion in money laundering flows which were held in non-Estonian customer accounts at the bank’s Estonian branch from 2007 to 2015. The money came from countries such as Russia, Azerbaijan, and Moldova.

The news outlet also reported that: “The whistleblower complaint identified Deutsche Bank AG and Citigroup Inc., both overseen by U.S. regulators, as involved with transactions into and out of Danske Bank’s Estonian branch.”

Citing a person familiar with the matter, The Wall Street Journal said that Deutsche Bank was as a correspondent bank for Danske that handled dollar wire transfers. Citigroup’s Moscow office was allegedly involved with some of the transfers through Danske’s Estonian branch.

Ceo of Danske Bank Ignored Warnings of Money Laundering

According to the Financial Times, the CEO of Danske Bank Thomas Borgen ignored warnings of suspicious transactions. Specifically, he ignored advice to scale back its Estonian branch when initially warned about the money laundering activities.

According to meeting minutes seen by the Financial Times, the CEO was informed back in October 2013, that: "The level of activity in its [Danske Bank’s] Estonian branch from outside the country — mostly from ex-Soviet states and Russia — was higher than that of rivals and ‘needed to be reviewed and potentially reduced’."

However, US authorities have not yet officially confirmed the investigation. Since last year, Danske has been conducting its own internal investigation into the activity in its Estonian branch. According to a notice on Danske’s website, it plans to release the results on September 19. Danish and Estonian authorities have also been looking into Danske Bank.