At the end of last week, Saxo Bank was served with a number of injunctions by Finanstilsynet (the Danish FSA) following a series of investigations that were launched during 2009 and 2010, to examine the bank’s commitment to investor protection and its anti-money laundering protocols.
During September and November 2009, the Danish FSA visited Saxo Bank headquarters under section 34 of the law of prevention of money laundering and terrorist financing and then again in March, April and May 2010.
By June 2 2010, the Danish FSA submitted a report to Saxo, saying (translated from Danish): “It is Finanstilsynet’s assessment that Saxo Bank’s business model and the scope of its business constitute a high risk for the bank to be misused for money laundering or financing of terrorism.
“Furthermore, it is Finanstilsynet’s assessment that Saxo Bank’s procedures with regard to minimising the risk for money laundering and financing of terrorism is insufficient, and that the bank has broken, and at the time of the investigation continued to break, certain rules relating to money laundering law.”
The Danish FSA says that it sampled corporate customers for evidence and can show that before May 2009, Saxo failed to gather sufficient details and indentification of prospective customers.
For this reason, the Danish FSA decided that Saxo was in breach overall of the Financial Business Act and has referred it to Det Finansielle Virksomshedsraad (the financial business law panel): “Finanstilsynet served an injection to the bank to put in place procedures that result in the bank achieving effective business controls in the area of money laundering, effective procedures to identify, manage, overlook and report on risks in the area of money laundering, comprehensive internal control procedures in the area of money laundering and those resources that are necessary to comply with law 71, paragraph 1 in the law of financial business.”
The Danish FSA has ordered that Saxo Bank must comply by this month.
Asked by theweeklyFiX to comment, Saxo acknowledges that the Danish FSA has found reason to order some improvement measures with regard to investor protection.
Bjorn Krog Andersen, general counsel and head of Saxo Bank’s legal department says: “Saxo Bank has taken cognizance of the Danish FSA’s investigation and that Saxo Bank, expediently, will make adjustments to its business processes and procedures so they meet the Danish FSA’s requirements entirely.”
Coincidentally, Saxo Bank sent out press releases during June this year, before the Danish FSA report was published, to draw attention to its new anti-money laundering software which complies with Danish FSA regulations: “NICE Actimize provides an integrated AML solution suite, including transaction monitoring, watch list filtering, sanctions monitoring and know your customer / customer due diligence, to help financial institutions comply with anti-money laundering rules and guidelines from regulators around the world.”
