FI slams Carnegie
TT/The Local · 28 Sep 2007, 09:09
Published: 28 Sep 2007 09:09 GMT+02:00
The action follows Carnegie's admission that three traders exaggerated their own trading gains, something that resulted in the bank overstating profits by 200 million kronor. This led in turn to the bank's staff being paid bonuses that were too high.
Finansinskpektionen (FI), the Swedish Financial Services Authority, said in a statement on Friday that Carnegie's internal checks were insufficient and that its annual reports for 2005 and 2006 were incomplete.
"Governance of the operations has been contradictory and the bank’s internal rules have been incomplete. The control functions have been significantly undersized in relation to the scope and risk of the operations," FI said.
FI said it would report the responsible auditors to the Supervisory Board of Public Accountants.
Carnegie came close to having its licence revoked, according to FI, but the presentation by the bank of an action plan meant that a warning and a fine were sufficient.
Carnegie's CEO Stig Vilhelmsson resigned overnight, according to FI chief Ingrid Bonde. Other Carnegie officials being forced to quit include the chairman, Christer Zetterberg, and board members Hugo Andersen, Niclas Gabrán, Mai-Lill Ibsen, Anders Ljungh, Dag Sehlin and Fields Wicker-Muirin.
The 50 million kronor fine is the highest FI is able to impose.
Carnegie has already reported three staff to the police, accused of fraud. Prosecutors are currently evaluating the accusations.
Carnegie's management had on Friday morning no immediate comment on the decision.