The entire board of Carnegie, Sweden’s largest investment bank, were forced to resign following an investigation into a trading scandal.
According to reports in the Times, Sweden’s Financial Supervisory Authority (FSA) ordered the bank’s board to be removed, in addition to imposing a $7.73 million fine for failing to supervise its traders.
Stig Vilhelmson, the chief executive, will resign following the fine, which is the largest the FSA can make, after three traders inflated their dealing profits by $97.5 million between 2005 and 2007.
The bank will be led, temporarily, by Anders Onarheim. Matti Kinnunen, chief operations officer, will be acting vice president. Nominations for a new board will be presented in November and the bank told the newspaper that customers would not be affected.
“The fact that incorrect valuations have been able to continue for such a long period of time is in our opinion due to the serious deficiencies that have existed in the governance and control of the bank’s operations,” says the FSA.