Danske is defending the class action-style case, which will go before Denmark’s Eastern High Court.
In Australian litigation, courts will commonly order parties to turn over large volumes of documents that can include private messages, emails and memos through a process called discovery. But QIC’s New York filing says that Danish law takes a different approach. The penalty for refusing to disclose a document is the court forming a negative view of a party’s motivation, the filing states. Deutsche Bank’s American operations are also outside the Danish court’s jurisdiction.
Danske’s then-chief executive quit over the money laundering scandal in 2018. Bloomberg
That’s why those pursuing Danske have gone to New York in an attempt to secure documents that they believe will show Deutsche Bank had critical concerns about money laundering through Danske and communicated them to the smaller bank. Those “red flags”, QIC alleges, would have triggered a duty for Danske’s parent company to investigate what was happening at its Eastern European subsidiary.
“That… is critical in helping it prove Danske’s wrongdoing and liability, and is relevant to all eight test cases selected by the High Court in Denmark, the outcomes of which will be of integral importance to the hundreds of other cases in the Danish Actions that remain stayed pending resolution of the test cases,” its filings read.
Deutsche has already paid tens of millions in fines and settlements over its dealings with Danske, which separately paid $US2 billion to authorities over the scandal last year. QIC and Deutsche were contacted for comment. Danske, Denmark’s largest bank, is not a party to the American litigation.
QIC is charged with supporting Queensland’s long-term finances and holds a substantial portfolio of commercial real estate and infrastructure assets. This case is the first time its losses from the Danske scandal, which are not quantified in the filing, have been made clear.
In other litigation cited in the QIC claim, the Securities and Exchange Commission claimed that Danske’s Estonian staff had conspired to enable the money laundering. It also said Danske’s anti-money laundering controls were weak. Money laundering out of Eastern Europe has long been a focus for US regulators, but has attained new prominence since Russia’s invasion of Ukraine and subsequent controls on money transfers.
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