DFS cited customer due diligence and transaction-monitoring weaknesses, while SEB says the US reviews of its historical processes have concluded and the DOJ took no action.
New York’s Department of Financial Services has secured a $33 million settlement with Skandinaviska Enskilda Banken and its New York branch over findings tied to anti-money-laundering controls and transaction monitoring. The settlement resolves DFS’s investigation into the bank’s compliance with New York banking requirements.
DFS said its review followed the 2016 Panama Papers leak and examined SEB’s relationship with law firm Mossack Fonseca. The department said it found weaknesses in customer due diligence, the treatment of high-risk clients and correspondent-banking relationships, as well as deficiencies in client files and risk calculations. The findings are the regulator’s account of the investigation and should be read alongside the consent order and the bank’s statement on the resolution.
DFS Cited Gaps in Customer and Correspondent Reviews
According to DFS, SEB did not adequately assess or mitigate money-laundering risks associated with some high-risk customers. The department also said the bank’s due diligence on high-risk correspondent banking partners, including foreign institutions, was insufficient. DFS cited incomplete client files, miscalculated AML risk and procedures for correspondent relationships that had not been updated adequately.
These controls are designed to help banks understand who their customers and counterparties are, how accounts are expected to be used and whether transactions fit those expectations. Correspondent banking adds another layer because one institution may process payments for another institution’s customers. Weak information at either end can make it harder to identify the parties and purpose behind cross-border flows.
The 2016 leak triggered reviews by regulators and authorities into the use of offshore structures and the banks that served related customers. FinanceFeeds has previously covered New York DFS enforcement tied to Swedbank and the Panama Papers. That action concerned a different bank and different findings; it provides context for the regulator’s continuing examination of how institutions handled information connected to Mossack Fonseca.
Transaction Monitoring in the Baltics Was Also Cited
DFS said SEB’s transaction monitoring programme in Estonia, Latvia and Lithuania had backlogs that delayed review of suspicious activity and sanctions risks. A system that produces alerts but cannot process them promptly may leave transactions awaiting review for too long. The department said this increased the risk that illicit activity could pass through the bank before it was assessed.
Transaction monitoring is a recurring focus of financial-crime enforcement because software rules, data quality and investigator capacity work together. A detection system can miss patterns if customer records are incomplete, risk categories are misapplied or alert volumes exceed the compliance team’s ability to investigate. In a separate case this year, FinanceFeeds reported on SEC allegations involving Merrill’s suspicious-activity reporting, another example of how monitoring and review processes can become supervisory issues.
SEB said it reached a final resolution with DFS following review of former customer due-diligence and Baltic transaction-monitoring processes from 2015 to 2019. The bank also said the US Department of Justice concluded its review without taking action, bringing the US matters relating to those historical AML measures to a close. The DOJ outcome is distinct from DFS’s consent order and penalty.
Settlement Closes a Historical Review
The $33 million payment resolves the New York regulator’s case. The source material does not describe the settlement as a finding about SEB’s current controls, and the bank framed the review as relating to historical procedures. Readers should not infer that every issue identified by DFS applies to the bank’s present-day systems or that the DOJ took enforcement action.
For banks, the case underscores the operational demands of maintaining customer files, risk scoring, correspondent-bank procedures and alert review capacity across subsidiaries. Regulators increasingly assess whether a bank can demonstrate that its controls work in practice, not only whether policies exist. The remediation and oversight terms in the consent order, rather than the fine alone, will show how DFS expects the identified gaps to be addressed.
SEB’s public statement describes the resolution as the conclusion of US authorities’ reviews. The consent order remains the controlling document for the DFS outcome, while the bank’s release provides its account of the resolution and the DOJ’s decision.
