SEC. v Danske Bank A/S
Civil Action No. 7:22-CV-10509 (S.D.N.Y.)
Feb. 16, 2023
On December 13, 2022, the Commission filed a complaint (the “Complaint”) alleging that from at least 2009 to 2016, Danske Bank A/S (“Danske”), through its Estonian branch (“Danske Estonia”), provided banking services to suspicious customers despite knowing there was a high degree of risk that such customers were potentially engaged in money laundering. The Complaint further alleged that Danske also knew or was reckless in not knowing of numerous red flags indicating that its employees and managers at Danske Estonia had, among other things, conspired with customers to circumvent the anti-money laundering (“AML”) laws and that Danske’s internal AML and “know your customer” safeguards were weak and ineffective. The Complaint also alleged that Danske knowingly or recklessly made materially misleading statements and omissions in its publicly-available reports stating that Danske was compliant with its legal obligations to prevent its services from being used for illicit purposes and that it had effectively managed these risks. See the Commission’s Complaint.
Danske was ordered to pay $178.6 million in disgorgement, $55.8 million in prejudgment interest, and a civil penalty of $178.6 million. The Commission deemed the disgorgement and prejudgment interest satisfied by the forfeiture and confiscation ordered in parallel criminal cases. The Commission was ordered to hold all funds, together with interest and income earned thereon (the “Fund”), pending further order of the Court. See Final Judgment.
The Commission holds $178,600,000 in the Fund in a Commission-designated account at the U.S. Department of the Treasury. Any accrued interest will be added to the Fund for the benefit of harmed investors.
On February 14, 2023, the Court granted the Commission’s motion and entered an Order that established a Fair Fund, pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002, for the $178,600,000 paid by the Danske (the “Fair Fund”), so it can be distributed to investors harmed by the conduct alleged in the Complaint. The Court’s Order also appointed Miller Kaplan Arase LLP as the Tax Administrator of the Fair Fund to fulfill the tax obligations of the Fair Fund, and authorized the Commission to approve and arrange payment of all tax obligations owed by the Fair Fund and the related fees and expenses of the Tax Administrator directly from the Fair Fund without further approval of the Court. See the Court’s Order.
For more information, please contact the Commission:
Office of Distributions