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Union pension fund sues Danske Bank, alleging securities fraud

A union pension fund has sued Danske Bank, alleging securities fraud and arguing that the bank's actions in recent years damaged the pension fund's investment in Danske Bank stock.

The lawsuit was filed Jan. 9 by the Plumbers & Steamfitters Local 773 Pension Fund, Glens Falls, N.Y., in a New York City federal District Court, accusing the company of "illicit business practice" that caused Danske Bank's American depository receipts to trade at "artificially inflated prices."

The union is seeking class-action status for all purchasers of Danske Bank's ADRs from Jan. 9, 2014 to Oct. 23, 2018, accused the bank and several officers of "lax controls," noting that the bank is now being investigated by regulators in five countries including the U.S.

In addition to suing the bank, the union also has sued several former officers, including the former CEO, Thomas Borgen, who resigned Sept. 19; two former CFOs; and the former chairman of the board.

The pension fund purchased 4,475 Danske Bank ADRs between June 15 and June 28 at prices ranging from $15.47 a share to $16.92 a share, according to the lawsuit. It sold all of the shares between Sept. 12 and Sept. 18 for prices ranging from $13.02 to $13.64 a share.

"We will consider the lawsuit and the further process in consultation with our legal counsel," Kenni Leth, head of external communications for Danske Bank, wrote in an email Thursday. "At the present time, we have no further comments."

Among Danske Bank's financial problems are a profit warning issued in late 2018 and preliminary charges filed in a case alleging money laundering.

The money laundering scandal cost Danske Bank "almost half its market value in 2018," according to Bloomberg News. "Estimates for fines have ranged from below $1 billion to over $8 billion."

The bank also lack a permanent CEO. The company's former head of its Danish banking operations, Jesper Nielsen, is serving as CEO on an interim basis, according to Bloomberg News.

The case is Plumbers & Steamfitters Local 773 Pension Fund vs. Danske Bank A/S et al.