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The high profile and increasingly worldwide saga which surrounds the allegations by regulatory and governmental authorities with relation to the manipulation of FX benchmarks has now made its way to Denmark, where discord among six employees of Danske Bank who have had the metaphorical finger pointed at them for suspected price rigging, has resulted in a specialist department of the Police approaching the bank’s senior management.
The Fraud Squad has interviewed all of the employees which have been charged in the case, including four members of staff and two managers, subsequent to which the answers provided by these employees contradict eachother, according to Danish news source EPN.
As a result of this, the authorities saw fit to send the Police to Danske Bank’s management to clarify what has been implemented as standard procedure in the bank in relation to the trading of certain asset classes.
“We can confirm that we have heard all the accused in the case, and it has caused us to ask further questions to the Danish Bank’s management,” said Acting Attorney General and head of the fraud squad Henrik Helmer Steen.
The new investigative measures mean that in all probability will not be before the summer until the Police makes a decision whether to bring indictments in the case.
The case was brought to light by two trades in illiquid CIBOR bond in 2009, which is suspected to be completed via parameters which were manipulated by the bank’s employees, with the result that an unknown number of customers paid a premium for a total of £2.4 million.
The financial authorites at the time made Danish Banking and Mortgage Denmark a deal with bond February 13, 2009 at a price which was 1.3 points higher than the market price and a corporation would later that day repay a loan and therefore purchase of £12 million of the bond. The raised rate gave the customer an additional cost of £154,440
Three weeks later, loans of approximately £650 million were due to be repaid by several customers. At this point, Danish Banking and Mortgage Denmark failed to disclose a trade conducted at a lower price on the same day. This made the customers’ bonds traded at a rate that was 0.35 points higher than the market price, which resulted in an extra £2,275,000 liabilty to customers.
Danske Bank discovered the matter in connection with it was to be material to another case in which the Danish financial services regulator is in the process of investigating whether Danish banks at large have tampered with the CIBOR rates.