Danske Suspends Six Bankers as Prosecutor Probes Bond Trades
Feb 7, 2014 11:01 AM CT
Customers use automated teller machines (ATM) outside a Danske Bank A/S branch in Copenhagen.
The Danish Public Prosecutor for Serious Economic and International Crime has today “brought accusations against Danske Bank of price manipulation under particularly aggravated circumstances,” the Copenhagen-based bank said.
Danske said an internal investigation found that its rules had been violated in transactions between its home-loan arm, Realkredit Danmark A/S, and Danske Bank in the mortgage bond market. The bank said it notified the Financial Supervisory Authority, prompting the police investigation against Realkredit Danmark, Danske Bank and six employees.
“Usually we say that price manipulation will, as a minimum, lead to jail time if they’re convicted,” Hans Fogtdal, a public prosecutor with the crime squad, said by phone. “None of the involved seems to have had a personal motive to commit the crime. It was about securing Danske Bank an additional profit.” The maximum time the employees face behind bars is four years, he said.
Denmark’s $550 billion mortgage bond market is the world’s largest per capita and more than 1 1/2 times the size of the economy. Consumers and businesses in the Nordic nation finance their home loans using bonds. Realkredit Danmark is the country’s biggest provider of bond-backed home loans after Nykredit Realkredit A/S.
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