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Plumbing problems – Danske Bank and ex-bosses sued

A union-based pensions fund in New York is leading a lawsuit against Danske Bank, and four recent top managers individually, over the effects of the money-laundry scandal on the stock value.

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The Danish giant Danske Bank and its four former top managers were sued on Wednesday, according to reports by news agencies including Reuters and Denmark’s Ritzau. The filing was made by the pension fund for members of a local club within the United Association, the labour union in the US for plumbers and pipefitters.

You delay, you pay

It accuses the bank of defrauding investors and inflating its share price by hiding, and failing to stop, extensive money laundering based at its Estonian branch.

The fund says $2.5 billion was knocked off the market cap of Danske Bank as the full extent of its money-laundring scandal in Estonia came to public knowledge this autumn.

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Targets former chairman and CEO

The four previous top managers named are Danske’s ex-chairman Ole Andersen and the bank’s acquitted CEO Thomas Borgen, together with two past CEOs. Andersen was replaced in December, after Borgen had to step down in September.

The case was filed at the District court in Manhattan, New York, by the fund called the Plumbers & Steamfitters Local 773 Pension Fund. It is represented by Robbins Geller Rudman & Dowd, a law firm specialized in securities fraud, reports Reuters.

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