Danske Bank (Danske) recently secured a big victory in the United States Court of Appeals for the Second Circuit. On August 25, 2021, the appellate court unanimously affirmed the Southern District of New York’s dismissal of an investor lawsuit brought by purchasers of DB American Depository Receipts (ADR) against Danske and its former officers and board members over alleged misrepresentations about Danske’s financial condition. We previously blogged about the lower court’s decision here. As we have blogged about here, here, here, and here, Danske Bank has been the subject of significant regulatory oversight due to its alleged AML failures of historical proportions, which has resulted in a foreseeable onslaught of investor lawsuits.
Although much of the Second Circuit’s opinion is focused on timing issues relevant to almost any investor lawsuit based on material misstatements and omissions, portions of the opinion are particularly relevant to investor claims resting on alleged AML failures and money laundering by financial institution customers. Importantly, neither knowledge of potential misconduct by customers gained by an institution from either its AML-related monitoring or whistleblower reporting, nor generalized claims to investors by an institution of robust AML compliance, will – standing alone – result in liability.
Continue Reading Danske Bank Secures a Big Victory in Investor Suit Based on Alleged AML Violations