Danske Bank A/S (OTC: DNKEY) Investor Securities Class Action Lawsuit 01/09/2019

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Company Name(s): 
Danske Bank
Case Name: 
Danske Bank Shareholder Class Action Lawsuit 01/09/2019
Case Status: 
Lawsuit Filed
Affected Securities
OTC: DNKEY
Lawsuit Overview
Type of Lawsuit: 
Shareholder Class Action
Date Filed: 
01/09/2019
Class Period Begin: 
01/09/2014
Class Period End: 
10/23/2018
Court of Filing: 
U.S. District Court for the Southern District of New York
Deadline To File for Lead: 
03/11/2019
Summary: 

An investor in shares of Danske Bank A/S (OTC: DNKEY) filed a lawsuit in the U.S. District Court for the Southern District of New York over alleged violations of Federal Securities Laws by Danske Bank A/S in connection with certain allegedly false and misleading statements made between January 9, 2014 and October 23, 2018.

Copenhagen, Denmark based Danske Bank A/S provides banking products and services to various customers.

On September 5, 2017, it was reported that Danske Bank A/S had hired the former head of Denmark’s intelligence agency to help it in its effort to counter money-laundering claims.

On September 21, 2017, Danske Bank A/S disclosed, among other things, that it had “expand[ed] its ongoing investigation into the situation at its Estonian branch.”

On December 21, 2017, it was reported that Danske Bank A/S “had been fined 12.5 million Danish crowns ($2 million)” by the Denmark’s Financial Supervisory Authority “for violating anti-money laundering rules in relation to the monitoring of transactions to and from correspondent banks,” and that Danske Bank was “examining whether its Lithuanian and Latvian branches had been involved in money laundering, expanding an investigation beyond its Estonian operations.”

On May 3, 2018, it was reported the Denmark’s Financial Supervisory Authority issued a report stating it had identified “serious weaknesses” in Danske Bank’s governance and that Danske Bank “was exposed ‘to significantly higher compliance and reputational risks than previously assessed.’”

On July 18, 2018, Danske Bank A/S stated that it wants to pay back approximately $230 million earned in profits in connection with its alleged role in an international money laundering scheme involving illicit funds from Russia, Azerbaijan and Moldova, which were funneled through Danske’s Estonian office.

On September 14, 2018,an article was published that disclosed that U.S. law enforcement agencies had begun investigating the scandal following a tip to the SEC from a whistleblower at least two years earlier.

Finally, on October 23, 2018, an article was published disclosing the full extent of the information the whistleblower had alerted Danske Bank’s senior executives to back in 2013 and detailing how Danske Bank had endeavored to silence the whistleblower for years.

According to the complaint the plaintiff alleges on behalf of purchasers of Danske Bank A/S (OTC: DNKEY) common shares between January 9, 2014 and October 23, 2018, that the defendants violated Federal Securities Laws.

More specifically, the plaintiff claims that between January 9, 2014 and October 23, 2018, the defendants failed to disclose that Danske Bank’s Estonian branch was facilitating money laundering through at least March 2016, that that a whistleblower had reported the Estonian money laundering to the Company in 2013, that Denmark’s Financial Supervisory Authority (the “DFSA”) had been investigating the Estonian money laundering since 2014, that Danske Bank had concealed the results of its own internal investigation from the DFSA, further exposing it to regulatory action and fines, that Danske Bank had been overstating its historical profits by including the profits derived from its illicit Estonian operations, and that that Danske Bank lacked effective internal and reporting controls. As a result of this information being withheld from the market, Danske Bank ADRs traded at artificially inflated prices of more than $20 each between January 9, 2014 and October 23, 2018.