COPENHAGEN (Reuters) - Denmark’s financial watchdog has filed a criminal complaint against Danske Bank (DANSKE.CO), the country’s biggest lender, over violations of market abuse regulations, the bank said in a statement on Wednesday.
The Financial Supervisory Authority (FSA) said that Danske had misinformed the financial market by facilitating so-called “wash trades”, in which the same person sells and buys securities, between August 12, 2016 and February 22, 2019. Such trades could misleadingly prop up or devalue the price of securities, it added.
“The FSA therefore finds that Danske Bank has violated the prohibition on market manipulation and has reported Danske Bank for this.”
Danske’s chief compliance officer, Philippe Vollot said the bank took the matter very seriously.
“We did not have adequate market monitoring in place and we have therefore, since 2019, made significant investments to strengthen the systems and controls in close dialogue with the FSA,” he said, adding that the Bank had not seen any indication of “intentional wrongdoing or any harm to customers or market participants”.
The FSA said it had also reported Danske Bank to the police for failing to properly monitor and report transactions, which could constitute market abuse.
Both violations can be punished by fines.
The FSA said it did not believe Danske Bank had intentionally facilitated trades with itself, but the transactions reflected flaws in the bank’s market surveillance.
“However, trading with oneself is illegal if the behaviour exhibited is market manipulative, regardless of whether the investor has traded with himself intentionally or not,” it said.
Danske Bank is currently being investigated by authorities in several countries after more than 200 billion euros in suspicious transactions flowed through its Estonian branch between 2007 and 2015, in one of the world’s biggest money-laundering scandals.
Reporting by Nikolaj Skydsgaard; Editing by David Goodman, Kirsten Donovan