Swedbank's Fired CEO Reported for Suspected Criminal Trades

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Michael Wolf, who was fired as chief executive officer of Swedbank AB earlier this week, has been reported to Sweden’s economic crime authority after a whistle blower complained of suspicious transactions.

Swedbank Chairman Anders Sundstroem said the bank contacted the financial regulator, which passed the case on to Sweden’s white-collar crime agency. The decision followed talks with the bank’s lawyers on the weekend of Jan. 30-31, Sundstroem said during a press conference on Friday. He declined to provide further details on the nature of the transactions. Sundstroem didn’t immediately inform Wolf or the bank of the whistle blower’s report, in compliance with Swedish law, he said.

“I’m sure everyone can understand the ‘Catch 22’ that Swedbank and I were in,” he said.

The bank’s Feb. 9 announcement that it had fired Wolf stunned markets. Swedbank shares, which had soared almost 10-fold during the former CEO’s seven-year tenure, slumped more than 5 percent when investors learned of his dismissal. Wolf said on Friday he denies the allegations and characterized Swedbank’s actions as an “ongoing smear campaign,” according to an e-mail sent to local newswire TT. “I welcome an investigation, which will prove that I’m innocent,” he said.

Wolf told Dagens Industri that he himself may be the whistle blower, after alerting Sundstroem to transactions related to his pension and custody account carried out on his behalf at the end of last year, which he approved. Wolf also said he couldn’t know for sure, because the details of the charges were unclear to him. Swedbank’s spokesman, Claes Warren, declined to comment, when contacted by phone.

Swedish media initially speculated the dismissal was linked to some questionable -- though not illegal -- real estate investments carried out under Wolf’s watch. Sundstroem said on Feb. 9 that the main reason for the firing was the need for a change in management as Swedbank tries to attract more clients. He said reports of a conflict of interest relating to real estate deals played a “subordinate role.”

For now, investors are still struggling to connect the dots. Sundstroem said he was unable to provide more information while a police probe is under way. Sweden’s Financial Supervisory Authority opened an investigation into Swedbank in December, spokesman Peter Svensson said on Feb. 9. He also declined to provide further details, citing the agency’s policy not to comment on investigations that are in progress.

Swedbank’s biggest shareholder, Folksam, has criticized the bank for failing adequately to regulate conflicts of interest. For the Swedish Shareholders’ Association, which is also battling the bank over marketing tactics, Wolf’s firing is “not the end of the story,” its CEO, Carl Rosen, said on Feb. 9. Rosen said the issues at Swedbank “obviously” involve “the whole board” and that he interprets the “firing of Michael Wolf as a way to try to sacrifice him to save the board.”