The Scandinavian lender giant Swedbank announced last week that the U.S. Securities and Exchange Commission (SEC) has closed its six-year investigation into the bank’s operations without taking enforcement action, eliminating one of three ongoing American probes related to alleged money-laundering violations.

SEC Closes Swedbank Money-Laundering Probe After Six Years

The SEC investigation, which began in 2019, examined the bank's past failures in anti-money laundering and counter-terrorism financing controls, along with problems in how Swedbank disclosed information about its Baltic operations.

"We are placing another investigation of historical shortcomings behind us," Deputy Chief Executive Officer Tomas Hedberg said in a statement.

While the SEC closure removes some legal uncertainty, Swedbank still faces investigations by the U.S. Department of Justice and New York's Department of Financial Services. The bank said yesterday (Sunday) it cannot predict the financial impact of these remaining probes or estimate when they might conclude.

Sweden's second-largest bank by market value has already paid heavily for its compliance failures. Swedish authorities imposed a 4 billion kronor ($426 million) fine in 2020 for violating anti-money laundering rules.

The remaining U.S. investigations could prove even more costly. Bloomberg Intelligence analyst Philip Richards estimated earlier this year that monetary fines could reach around $386 million, matching what the bank paid to Swedish regulators. However, he cautioned that penalties could climb closer to $1 billion if structured similarly to the $2 billion settlement Danske Bank agreed to in 2022.

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Baltic Operations Under Scrutiny

The investigations center on Swedbank's operations in the Baltic states, where the bank became entangled in a massive money-laundering scandal that also engulfed Denmark's Danske Bank. Regulatory scrutiny intensified after reports surfaced about suspicious transactions flowing through the banks' Estonian branches.

The SEC probe specifically focused on whether Swedbank adequately disclosed information about its Baltic operations to investors and regulators. The investigation examined the bank's compliance with U.S. securities laws regarding transparency and investor communications.

In response to the announcement, the bank’s shares on Nasdaq Nordic rose more than 2.7 percent on Monday, opening with an upward gap on the chart and testing the level of SEK 273.3 per share.