Enforcement Takeaways:
– This conduct was dated, covering 2015 – 2109;
– The jurisdictional hook was modest, with only $2.5 million of funds flowing through SEB’s New York Branch in that time period;
– Many of the deficiencies were identified by Internal Audit – demonstrating both its importance to strong compliance, as well as the need for senior management to embrace/execute on its findings.
According to the Consent Order’s allegations:
– NYDFS’ investigation arose in part from the Departments examination of financial institutions connections to the Panama Papers disclosures in 2016, which revealed extensive offshore financial activities and potential money laundering involving financial institutions around the world. This settlement follows on a similar settlement with Swedbank for $50 million in July 2026.
– NYDFS found that between 2015 and 2019, SEBs Baltic subsidiaries failed to maintain adequate customer due diligence and KYC controls, particularly for high-risk non-resident customers and companies with foreign beneficial owners. Nested banking and “downstreaming” were prominent.
– The regulator’s jurisdictional hook was premised on just $2.5 million in transactions running through SEB’s New York Branch – but also relied on approximately $144 billion moving through another entity licensed by NYDFS in the relevant time period.
– NYDFS found SEB’s transaction monitoring program in its Baltic subsidiaries in Estonia, Latvia, and Lithuania to be deficient; the transaction monitoring systems were “backlogged, allowing transactions to evade timely review for money laundering and sanctions risks, and further exposing the Bank to the risk of processing illicit transactions.”
— Although SEB had to pay the significant sum of $33 million, there was no additional remediation, monitor or consultant required, given the age of the violations.