Danske Bank Executives’ Heads Are on the Block

(Bloomberg) -- Denmark’s financial supervisor plans to hold board members of Danske Bank A/S personally accountable if the lender is again caught misleading authorities.

“Their heads are on the block,” Jesper Berg, director general of the Financial Supervisory Authority, said in an interview as his office resumes an investigation into Denmark’s biggest bank.

Danske has admitted that a tiny Estonian unit may have been used to launder a “large” part of about $234 billion between 2007 and 2015. Criminal investigations into the bank are under way in Denmark and Estonia, and U.S. and U.K. authorities are looking at the case. Chief Executive Officer Thomas Borgen, 54, has resigned and Chairman Ole Andersen says that several employees have been reported to the police.

Andersen, 62, said this week he also considered resigning because of the laundering scandal, but that he decided to stay on, for now, to deal with the “task” at hand. The remarks, made in connection with Danske’s internal report on the laundering case, show the extent to which some of the titans of Denmark’s financial establishment have had their reputations tainted by the scandal.

Twelve people sit on Danske’s board of directors, including Vice Chairman Carol Sergeant, whose career spans posts including chief risk officer at Lloyds Banking Group Plc, as well as regulatory roles in the U.K.

Berg is under pressure to show that regulators are on top of the Danske case. The agency opened an inquiry last year, but only after Danish newspaper Berlingske reported the suspicious flows at Danske’s Estonian unit. That inquiry, concluded in May, found that Danske had repeatedly misled both Danish and Estonian authorities, and resulted in an $800 million capital penalty.