SEB pays 33 million penalty to regulator
Swedish bank Skandinaviska Enskilda Banken (SEB) and its New York division will settle with New York State’s financial regulator by paying a $33 million fine under a consent agreement. The penalty stems from an inquiry into whether SEB adhered to New York Banking Law and maintained effective anti-money laundering safeguards.
The examination centered on SEB’s historical practices for customer due diligence and transaction monitoring within its Baltic operations between 2015 and 2019. The regulator’s findings highlighted significant shortcomings in SEB’s adherence to the Bank Secrecy Act and Anti-Money Laundering (BSA/AML) regulations.
SEB was found to have neglected proper due diligence on high-risk correspondent banks, including foreign entities, maintained incomplete client records, inaccurately assessed AML risks, and failed to update policies governing these relationships. Moreover, the regulator determined that SEB’s Baltic subsidiaries lacked effective transaction monitoring systems to identify and prevent suspicious activities.
SEB says it has cooperated throughout the investigation and recognizes the measures it has taken to remediate the deficiencies identified in the consent order. The bank has accepted the terms of the resolution, thereby concluding the authority’s review. They have implemented a range of measures to strengthen their financial crime prevention.
Remedial actions include updated policies, enhanced processes, improved controls, advanced detection systems, full staff training, and increased collaboration with regulatory bodies and industry counterparts. The Department of Justice (DOJ) has also concluded its review without imposing any penalties.
According to Cecilia Wolrath Ekenbäck, who leads SEB’s group compliance, the review largely aligns with the bank’s internal assessments of its past Baltic operations during the specified period. SEB has since undertaken significant efforts to bolster its defenses and will continue to adapt as external risks change.
SEB’s fine follows closely on the heels of another Swedish bank, Swedbank, which agreed to a $50 million penalty in a consent order with the New York State DFS. This was in response to Swedbank’s non-compliance with New York Banking Law and its inadequate cooperation with information requests, as announced by the regulator in July.
The bank’s efforts to improve its compliance and anti-money laundering programs are ongoing. SEB is committed to maintaining a strong and effective compliance program to prevent financial crimes. The measures implemented by SEB are designed to prevent similar deficiencies in the future.
