Danske’s Cast of Characters Steps Into the Limelight

(Bloomberg) -- The general public is about to get a much closer look at some of the key protagonists attached to the Danske Bank A/S money laundering scandal.

  • Howard Wilkinson, the whistle-blower who used to work at the Estonian unit at the center of the case, will testify before lawmakers in Copenhagen on Monday.
  • Stephen Kohn, Wilkinson’s lawyer and a founding director of the National Whistleblower Center, will join his client.
  • Jesper Nielsen, Danske’s interim CEO, will represent the bank after Thomas Borgen was escorted out of the building last month for his role in the scandal.
Danske’s Cast of Characters Steps Into the Limelight
  • Jesper Berg, the director general of the Danish FSA, will testify after the agency was placed under investigation by the European Banking Authority.

The Danish parliament will hear testimony on who knew what, and when, amid evidence that much of about $230 billion that flowed through an Estonian unit of Danske between 2007 and 2015 was illicit. Wilkinson’s lawyer says the Briton is “fully committed” to cooperating with the Danish parliament.

But the former Danske employee has already said he feels that his personal safety is at risk from “angry” former employees at the Estonian branch, and from clients who benefited from the setup there.

Danske is under criminal investigation by the U.S. Justice Department. The one thing everyone now wants to know is how severely the U.S. will come down on Danske which, as Denmark’s biggest bank, has assets that are equivalent to about 1.5 times its GDP.

Both Danske and the Danish government are making clear they won’t push back against the DOJ and just want to put the scandal behind them as soon as possible.

Business Minister Rasmus Jarlov says, “The case obviously shouldn’t be too drawn out.”

Danske has gone from dismissive to humble. A few months ago, the (since ousted) chairman said a U.S. investigation in such a case would be “highly unusual.” Now, the acting CEO says Danske will do everything in its power to cooperate.

U.S. Approach

David Miller, a former prosecutor at the DOJ, says prosecutors and senior leadership at the department “are cognizant of the importance in not crippling important, large financial institutions with multi-billion fines. But that doesn’t mean that there won’t be that level of fines imposed.”

For now, Denmark is operating under the assumption that Danske won’t be fined more than about $1.5 billion. That’s what the Danish regulator has told the bank to have in extra capital because of the laundering case. Analysts have estimated that Danske could be facing a penalty as high as $8 billion.

Carol Beaumier, an anti-laundering expert at the consulting firm Protiviti, says U.S. authorities will take into consideration how much Danske has done to clean up its act.

“Typically, if you look at how enforcement actions play out in the U.S., they will look at how responsive the institution, its management and its board have been, to the issues and what improvements they’ve made on their own,” she said.

Being Responsive

Danske has been responsive. The man who oversaw its Baltic operations from 2012 left in April. Borgen, the former CEO, was removed in October. Ole Andersen, the chairman, is set to leave on Dec. 7 after Danske’s biggest shareholder, frustrated by developments, called for his replacement. The bank has also published a report detailing its failures, and it’s spending a lot more on compliance.

Danske’s Cast of Characters Steps Into the Limelight