Swedbank's SEC Probe Closure: A Step Toward Recovery or a Fleeting Reprieve?

Swedbank’s recent announcement that the U.S. Securities and Exchange Commission (SEC) has closed its six-year investigation without enforcement action is a welcome development for the Swedish bank. According to a report by Bloomberg, the SEC’s decision marks the resolution of one of three ongoing U.S. probes tied to anti-money laundering (AML) and counter-terrorism financing violations at its Baltic branches [1]. While this closure offers a temporary sigh of relief, investors must remain cautious. The bank still faces scrutiny from the U.S. Department of Justice (DOJ) and the New York Department of Financial Services (NYDFS), both of which could impose hefty penalties.

The SEC’s decision to avoid penalties reflects a broader regulatory trend of balancing enforcement with institutional reforms. Swedbank has implemented over 150 governance and AML measures since the Danske Bank scandal, which the SEC acknowledged as a mitigating factor [2]. However, the absence of penalties does not erase the bank’s history of regulatory missteps. In 2020, Swedish and Estonian authorities fined Swedbank SEK 4 billion ($386 million) for AML failures, and in 2023, its Latvian subsidiary settled with the U.S. Office of Foreign Assets Control (OFAC) for $3.4 million over Crimea sanctions violations [4]. These precedents suggest that regulators are not shy about penalizing systemic compliance lapses.

The real question for investors is whether the SEC’s leniency signals a broader shift in enforcement priorities or merely a pause before the next blow. The DOJ and NYDFS investigations remain active, and their outcomes could drastically reshape Swedbank’s financial outlook. For context, Danske Bank faced a $1 billion penalty in 2022 for similar AML failures, while Nordea was fined $35 million by NYDFS in 2024 for inadequate AML controls [3]. If Swedbank’s remaining probes follow these patterns, the bank could face penalties ranging from hundreds of millions to over a billion dollars.

Swedbank’s management has emphasized its commitment to “resolving legacy regulatory issues,” but the market’s reaction has been muted. The bank’s stock has underperformed regional peers, and analysts remain skeptical about its ability to fully restore investor confidence. A 2023 internal investigation by Clifford Chance revealed deep-rooted governance flaws, including a culture that prioritized high-risk customer acquisition over compliance [4]. These structural issues could linger, even if the SEC probe is fully resolved.

For now, the SEC’s closure is a step forward—but not a victory. Investors should view this as a mixed signal: regulatory scrutiny is easing in one front, but the battle is far from over. The key takeaway is that Swedbank’s recovery hinges on resolving the DOJ and NYDFS inquiries without further financial blowouts. Until then, the bank remains a high-risk bet, with its stock price likely to remain volatile.

Source:[1] Bloomberg, Swedbank Says SEC Has Closed Six-Year Probe Without Enforcement [https://www.bloomberg.com/news/articles/2025-09-07/swedbank-says-sec-has-closed-six-year-probe-without-enforcement][2] MLQ.ai, US SEC Closes Five-Year Probe into Swedbank With No Enforcement Action [https://mlq.ai/news/us-sec-closes-five-year-probe-into-swedbank-with-no-enforcement-action/][3] Banking Dive, NYDFS Fines Nordea $35M Over AML Failures [https://www.bankingdive.com/news/nordea-nydfs-35-million-aml-bsa-panama-papers-russia-azerbaijan-baltic-vesterport/725503/][4] Money Laundering News, Swedbank Latvia Settles with OFAC for Apparent Crimea Sanctions Violations [https://www.moneylaunderingnews.com/2023/07/swedbank-latvia-settles-with-ofac-for-apparent-crimea-sanctions-violations/]