Just as we anticipated, the massive $150 billion money laundering scandal unfolding in the Estonian branch of Danske bank has finally attracted the scrutiny of international regulators, who have seized on the opportunity to tighten the noose around the neck of criminals and corrupt oligarchs operating in the Commonwealth of Independent States.
According to the Wall Street Journal, the Justice Department, Treasury Department and Securities and Exchange Commission are each examining Danske Bank following a whistleblower complaint. The complaint also named Deutsche Bank and Citigroup as potentially complicit in the fraud, with DB acting as a correspondent bank on some of the transactions while some of the funds were run through Citigroup’s Moscow branch.
Shares are plunging on the news that a heavy-hitting international regulator is looking into the scandal, which has already spurred investigations in Denmark (where Danske is based) and Estonia. They were down 3% in recent trading as fears of a potential “death blow sanction” – where a bank is excluded from handling dollars – intensified.