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Courts

Institutional investors sue Danske Bank after money laundering, cover-up investigations

A group of institutional investors filed a lawsuit against Danske Bank, accusing the firm of money laundering and a subsequent cover-up by senior leadership, said Olav A. Haazen, director at law firm Grant & Eisenhofer, which is representing the plaintiffs, in a phone interview.

The lawsuit was filed in the Copenhagen City Court on March 14, on behalf of Asian, Australian, European and North American pension funds by Grant & Eisenhofer and law firm DRRT. Investors, which Mr. Haazen said he could not name, seek $475 million in damages.

The investor lawsuit follows internal and external investigations that found that Danske Bank's senior management knew about $230 billion in money laundering at its Estonian branch since 2013.

Danske is under investigation in the U.S., as well as in Denmark, Estonia and France amid allegations it helped criminals from the former Soviet Union launder money until as recently as 2015.

"The real scandal isn't about a small foreign bank branch going rogue — it's about the shocking concealment of criminality that went straight to the top of the enterprise," Mr. Haazen said in a news release. "Danske Bank's management engaged in a concerted cover-up of its enormous money laundering exposure, while continuing to paint a rosy picture to investors," he said.

The lawsuit was filed on behalf of all investors who have purchased Danske Bank securities since Dec. 31, 2012.

Mr. Haazen said a second filing will be made June 1 by another group of investors.

Danske Bank could not be reached for a comment.