On October 15, 2026, the New York State Department of Financial Services (“NYDFS” or the “Department”) announced that Stockholm-based Skandinaviska Enskilda Banken AB and its New York Branch (together, “SEB”) agreed to pay a $33 million penalty to resolve an investigation into the bank’s anti-money laundering (“AML”) failures and non-compliance with New York law. The probe grew out of the 2016 Panama Papers leak of records from the law firm Mossack Fonseca, which prompted the NYDFS to examine whether its licensees, including SEB, had ties to the firm. According to the NYDFS, investigators uncovered serious weaknesses in the bank’s Bank Secrecy Act/AML program. These included inadequate customer due diligence, insufficient steps to manage the risks posed by high-risk clients, and poor vetting of high-risk foreign correspondent banks, all of which exposed the New York market to money laundering risk.
According to the consent order, from 2015 to 2019, SEB failed to maintain an effective AML program at its Baltic subsidiaries, even though it knew those units handled large volumes of transactions for high-risk, non-resident clients. Investigators found that the subsidiaries failed to perform required due diligence reviews and that customer files were often missing key information, such as beneficial ownership details and tax residency. Furthermore, in 2017, the Baltic subsidiaries introduced a risk-scoring model that allegedly failed to raise clients’ risk ratings when key information was missing, allowing high-risk customers to be classified as low-risk. According to the NYDFS, the subsidiaries also performed only their lowest level of due diligence on several high-risk correspondent banks that were later linked to major European money laundering scandals, and they provided high-risk “downstreaming” services that obscured the parties to certain transactions. The order also describes a period of more than a month in 2017 when SEB Estonia’s system generated no alerts at all; payments that were processed without sanctions screening during system outages; and suspicious activity reports that were filed late or never filed.
Investigators found that these failures directly impacted the New York market. According to the NYDFS, approximately $300 million in transactions from the Baltic subsidiaries moved through the New York Branch between 2006 and 2019, including $2.5 million between 2015 and 2019. In addition, the NYDFS found that New York banks were exposed to the risk of financial crime by SEB’s use of two U.S. clearing banks that processed hundreds of billions of dollars in Baltic-related transactions during the relevant timeframe.
The NYDFS concluded that SEB’s practices violated New York’s AML and transaction monitoring regulations, 3 N.Y.C.R.R. ยงยง 116.2 and 504.3. Under the settlement, SEB agreed to pay the $33 million penalty, cooperate fully with the NYDFS, and, if the Department suspects a material breach of the order, show that no such breach occurred. The NYDFS agreed to the settlement after considering SEB’s cooperation with investigators and the bank’s remediation of the problems identified. The Department also agreed not to take further action regarding the conduct covered by the order as long as SEB complies with its terms, but it reserved the right to act on any conduct that SEB did not disclose.
NYDFS Press Release | Consent Order