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IMF, Njord Law Firm and Quinn Emanuel propose shareholder action against Danske Bank over one of the world’s largest money-laundering scandals

January 22, 2019

IMF, Njord Law Firm and Quinn Emanuel propose shareholder action against Danske Bank over one of the world’s largest money-laundering scandals

(LONDON, UNITED KINGDOM 22 January 2019): IMF Litigation Funding Services Limited (IMF LFS), a wholly owned subsidiary of IMF Bentham Limited (ASX:IMF) (IMF), one of the world’s largest and most respected litigation funders, announced today a proposed shareholder action for shareholders of Danske Bank A/S (CPSE:DANSKE) (Danske Bank), to be led by specialist Danish law firm NJORD Law Firm and leading global litigation law firm Quinn Emanuel. The action will seek compensation for shareholders who lost millions of euros in value as a result of perceived errors and omissions committed by Danske Bank’s management and Danske Bank’s failure to disclose to the market the circumstances and magnitude of alleged unlawful activities within its Estonian branch. Background Danske Bank is the largest financial institution in Denmark and has a presence in sixteen countries. In 2007 Danske Bank acquired an Estonian branch as part of its acquisition of Finnish-based Sampo Bank. The Estonian branch held a non-resident portfolio comprising customers from the Russian Federation and the larger Commonwealth of Independent States, including countries such as Azerbaijan and Ukraine. In 2007 Danske Bank’s management were advised by the Russian Central Bank, via the Danish Financial Supervisory Authority, of concerns regarding the non-resident customers of the Estonian branch, including possible tax and custom payments evasion and criminal activity including money laundering. Despite many warnings, including a report from a whistle-blower employed in the Estonian branch in early 2014, and audit letters from Group Internal Audit, Danske Bank’s anti-money laundering procedures at the Estonian branch failed to respond and were manifestly inadequate. It was not until 19 September 2018 that Danske Bank provided sufficient information to inform the market of the true scale of the problems within Danske Bank. Over the course of 2018, Danske Bank’s shareholders experienced a substantial fall in their share value, Shares trading on 2 January 2018 at the equivalent of €25.62 fell to the equivalent of €18.70, following the disclosure on 19 September 2018, (a fall of €6.92 or 27%). IMF LFS’ Investment Manager Alistair Croft said: “EU Justice Commissioner Vera Jourova has referred to the money laundering uncovered within the Bank as ‘the biggest scandal we have now in Europe.’ The failure to disclose approximately €200bn of suspicious money flowing through its Estonia branch has caused serious harm to Danske’s financial position and its reputation. Reports make clear that Danske Bank continued to downplay the problems publicly and gave the impression they were largely historical matters that were substantially resolved. Although Danske Bank engaged in dialogue over many years with regulators in Estonia and Denmark, management disclosed no inkling of any serious issues to their shareholders.” Christian Benedictsen-Nislev, lead partner at NJORD Law Firm, stated: “In our assessment, Danske Bank failed to provide adequate and timely information to the market of the nature and extent of the problems in the Bank, resulting in inflated share prices. NJORD Law Firm is committed to assist shareholders in seeking compensation for losses suffered as a result hereof.” What should Danske Bank shareholders do? The shareholder action is open to investors who suffered loss after acquiring shares in Danske Bank between 29 April 2014 and 19 September 2018 (inclusive). NJORD Law Firm, Quinn Emanuel and IMF encourage all shareholders who acquired shares in Danske Bank during this period to register their interest as soon as possible via IMF’s confidential, dedicated website page (https://www.imf.com.au/danske) or by contacting IMF LFS in London or the lawyers directly. IMF LFS, together with both law firms, will host a group telephone conference call on 31 January 2019 to explain to shareholders how the claim will be run. To register for this call, please email danske@imf.com.au and access details will be posted on IMF’s webpage (https://www.imf.com.au/danske) nearer the time. ABOUT IMF IMF is one of the leading global litigation funders, headquartered in Australia and with offices in the US, Canada, Singapore, Hong Kong and London. IMF has built its reputation as a trusted provider of innovative litigation funding solutions and has established an increasingly diverse portfolio of litigation funding assets. IMF has a highly experienced litigation funding team overseeing its investments. We have a 90% success rate over 179 completed investments and have recovered over AU$1.4 billion for clients since 2001. As at 30 September 2018, there are 74 live investments with an aggregate estimated portfolio for all investments globally of approximately AU$5.8 billion. IMF LFS is a wholly owned subsidiary of IMF and provides dispute finance, investment capital and strategic services for disputes in the EMEA region, which includes the UK, mainland Europe, Middle East and Africa. For further information regarding IMF and its activities, please visit www.imf.com.au ABOUT NJORD LAW NJORD Law Firm is a full-service law firm serving local and international clients through the firm’s offices across the Nordic countries, including Denmark and Estonia. NJORD Law Firm’s litigation department is one of the largest and most experienced among the Top 10 Danish law firms. The firm’s many expert litigators include lawyers specializing in capital markets and securities litigation, and the litigation department has substantial experience with complex, multi-party litigation. For further information about NJORD Law Firm, please visit www.njordlaw.com ABOUT QUINN EMANUEL One of Quinn Emanuel’s largest practice areas is securities litigation. For decades, the firm has represented both plaintiffs and defendants in many of the highest-profile securities cases in the United States. More recently, their global presence has allowed them to advise and represent clients in a broad range of complex securities disputes in major financial markets overseas, including Australia, the U.K., Europe, and Asia. Many of their representations have involved dozens of related shareholder-derivative and class action claims. Over the past eight years, they have achieved verdicts and settlements totalling over $47 billion for their clients in the wave of litigation that arose in the aftermath of the U.S. financial crisis. For further information about Quinn Emanuel, please visit www.quinnemanuel.com

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High Court Refuses BHP Permission to Appeal Landmark Mariana Liability Judgment 

By John Freund |

Pogust Goodhead welcomes the decision of Mrs Justice O’Farrell DBE refusing BHP’s application for permission to appeal the High Court’s judgment on liability in the Mariana disaster litigation. The ruling marks a major step forward in the pursuit of justice for over 620,000 Brazilian claimants affected by the worst environmental disaster in the country’s history. 

The refusal leaves the High Court’s findings undisturbed at first instance: that BHP is liable under Brazilian law for its role in the catastrophic collapse of the Fundão dam in 2015. In a landmark ruling handed down last November, the Court found the collapse was caused by BHP’s negligence, imprudence and/or lack of skill, confirmed that all claimants are in time and stated that municipalities can pursue their claims in England. 

In today’s ruling, following the consequentials hearing held last December, the court concluded that BHP’s proposed grounds of appeal have “no real prospect of success”. 

In her judgment, Mrs Justice O’Farrell stated:  “In summary, despite the clear and careful submissions of Ms Fatima KC, leading counsel for the defendants, the appeal has no real prospect of success. There is no other compelling reason for the appeal to be heard. Although the Judgment may be of interest to other parties in other jurisdictions, it is a decision on issues of Brazilian law established as fact in this jurisdiction, together with factual and expert evidence. For the above reasons, permission to appeal is refused”. 

At the December hearing, the claimants - represented by Pogust Goodhead - argued that BHP’s application was an attempt to overturn detailed findings of fact reached after an extensive five-month trial, by recasting its disagreement with the outcome as alleged procedural flaws. The claimants submitted that appellate courts do not re-try factual findings and that BHP’s approach was, in substance, an attempt to secure a retrial. 

Today’s judgment confirmed that the liability judgment involved findings of Brazilian law as fact, based on extensive expert and factual evidence, and rejected the defendants’ arguments, who now have 28 days to apply to the Court of Appeal.  

Jonathan Wheeler, Partner at Pogust Goodhead and lead of the Mariana litigation, said:  “This is a major step forward. Today’s decision reinforces the strength and robustness of the High Court’s findings and brings hundreds of thousands of claimants a step closer to redress for the immense harm they have suffered.” 

“BHP’s application for permission to appeal shows it continues to treat this as a case to be managed, not a humanitarian and environmental disaster that demands a just outcome. Every further procedural manoeuvre brings more delay, more cost and more harm for people who have already waited more than a decade for proper compensation.” 

Mônica dos Santos, a resident of Bento Rodrigues (a district in Mariana) whose house was buried by the avalanche of tailings, commented:  "This is an important victory. Ten years have passed since the crime, and more than 80 residents of Bento Rodrigues have died without receiving their new homes. Hundreds of us have not received fair compensation for what we have been through. It is unacceptable that, after so much suffering and so many lives interrupted, the company is still trying to delay the process to escape its responsibility." 

Legal costs 

The Court confirmed that the claimants were the successful party and ordered the defendants to pay 90% of the claimants’ Stage 1 Trial costs, subject to detailed assessment, and to make a £43 million payment on account. The Court also made clear that the order relates to Stage 1 Trial costs only; broader case costs will depend on the ultimate outcome of the proceedings. 

The costs award reflects the scale and complexity of the Mariana case and the way PG has conducted this litigation for more than seven years on a no-win, no-fee basis - funding an unprecedented claimant cohort and extensive client-facing infrastructure in Brazil without charging clients. This recovery is separate from any damages award and does not reduce, replace or affect the compensation clients may ultimately receive. 

Announcements Commercial Fundraising

Sigma Funding Secures $35,000,000 Credit Facility, Bryant Park Capital Serves as Financial Advisor

By John Freund |

Bryant Park Capital (“BPC”) announced today that Sigma Funding has recently closed a $35 million senior credit facility with a bank lender. Sigma Funding is a rapidly growing litigation finance company focused on providing capital solutions across the legal ecosystem.

Sigma’s experienced executive team oversees a portfolio of businesses spanning insurance-linked litigation and other sectors, bringing a proven track record of successful growth and meaningful exits.

Bryant Park Capital, a leading middle-market investment bank, served as financial advisor to Sigma Funding in connection with the transaction.

“Bryant Park Capital was an indispensable advisor to Sigma and worked closely with our management team throughout the process,” said Charlit Bonilla, CEO of Sigma Funding. “BPC’s experience in the litigation finance space was critical in identifying potential banking partners and ultimately structuring our credit facility. Their extensive industry knowledge helped bring this deal to a successful close, and we are grateful for their support. We look forward to doing more business with the BPC team.”

About Sigma Funding

Founded in 2021, Sigma Funding is a leading New York–based litigation funding platform that provides pre- and post-settlement advances to plaintiffs involved in contingency lawsuits, as well as financing solutions for healthcare providers and attorneys. The company is the successor to the founders’ prior venture, Anchor Fundings, a pre-settlement litigation funder that was acquired by a competitor. 

For more information about Sigma Funding, please visit www.sigmafunding.com.

About Bryant Park Capital

Bryant Park Capital is an investment bank providing M&A and corporate finance advisory services to emerging growth and middle-market public and private companies. BPC has deep expertise across several sectors, including specialty finance and financial services. The firm has raised various forms of credit and growth equity and has advised on mergers and acquisitions for its clients. BPC professionals have completed more than 400 engagements representing an aggregate transaction value exceeding $30 billion.

For more information about Bryant Park Capital, please visit www.bryantparkcapital.com.

Announcements Commercial Deals

Apex Group Ltd Selected to Support Seven Stars Legal Group Ltd’s Pioneering Tokenised Litigation Fund in Dubai

By John Freund |

Apex Group Ltd (“Apex Group”), one of the world's largest fund administration and solutions providers, today announced it has been selected to provide fund administration and digital asset infrastructure for the anticipated Seven Stars Legal Group Ltd (“Seven Stars”) Tokenised Litigation Fund, a pioneering investment vehicle that will combine institutional-grade litigation finance with blockchain technology.

The proposed fund, targeting GBP 50-250 million in commitments with an anticipated first close of GBP 50 million by March 31, 2026, represents a significant innovation in alternative investments. Once launched, the tokenised structure is expected to reduce traditional investment minimums from GBP 1 million to GBP 50,000, making institutional-quality litigation finance accessible to a broader range of qualified investors.

Subject to regulatory approvals and successful fund structuring, Apex Group is positioned to provide comprehensive fund administration services, while its digital asset platform, Apex Digital 3.0 (including Tokeny), would handle the token issuance and management infrastructure. This dual capability positions Apex Group as the sole provider managing both traditional fund administration and digital asset components under one unified platform.

Upon launch, Seven Stars will act as Investment Manager responsible for portfolio selection and management.

“Our selection to support Seven Stars' innovative fund structure exemplifies our commitment to bridging traditional finance with digital innovation,” said Agnes Mazurek, Global Head of Digital Assets at Apex Group. “By providing both conventional fund administration and tokenisation infrastructure, we're positioned to help fund managers unlock new distribution channels and operational efficiencies while maintaining institutional-grade governance and compliance standards.”

Offering up to a capped 16% annual return backed by diversified UK litigation portfolios, Seven Stars brings significant experience to the venture, having already deployed over GBP 44 million in UK litigation finance and funded more than 56,000 legal claims with a proven track record of performance, together with a team which includes leading Silk, Louis Doyle KC, who sits on the board and Advisory Committee at Seven Stars.

“Apex Group's expertise in both traditional fund administration and digital assets makes them the ideal partner for this groundbreaking initiative,” said Leon Clarance, Chief Strategy Officer at Seven Stars. "Their infrastructure will enable us to deliver the operational efficiency gains of tokenisation while maintaining the rigorous compliance and reporting standards our institutional investors expect.”

Mazurek added: “We are pleased to be supporting Seven Stars in this groundbreaking project. Our mission at Apex Group is to help clients bridge the TradFi and DeFi universes and this project perfectly represents this connectivity.”

Planned Partnership Capabilities

The anticipated partnership would leverage several key Apex Group capabilities:

  • Fund Administration: NAV calculation, investor services, and regulatory reporting 
  • Digital Asset Infrastructure: Token issuance, custody, and lifecycle management via Apex Digital 3.0
  • Regulatory Compliance: Full regulatory oversight and compliance monitoring 
  • Investor Onboarding: Streamlined KYC/AML processes for both traditional and digital investors

The proposed tokenised structure would enable secondary trading after a 6-month lock-in period, providing liquidity options traditionally unavailable in litigation finance funds. Smart contract automation is projected to reduce administrative costs by up to 90%, with anticipated savings passed through to investors.

This announcement follows Apex Group's recent expansion of its digital asset capabilities in the DIFC, positioning the firm as a leader in supporting the convergence of traditional finance and blockchain technology in the Middle East's premier financial hub.

About Apex Group

Apex Group is dedicated to driving positive change in financial services while supporting the growth and ambitions of asset managers, allocators, financial institutions, and family offices. Established in Bermuda in 2003, the Group has continually disrupted the industry through its investment in innovation and talent.

Today, Apex Group sets the pace in fund and asset servicing and stands out for its unique single-source solution and unified cross asset-class platform which supports the entire value chain, harnesses leading innovative technology, and benefits from cross-jurisdictional expertise delivered by a long-standing management team and over 13,000 highly integrated professionals.   

Apex Group leads the industry with a broad and unmatched range of services, including capital raising, business and corporate management, fund and investor administration, portfolio and investment administration, ESG, capital markets and transactions support. These services are tailored to each client and are delivered both at the Group level and via specialist subsidiary brands.

The Apex Foundation, a not-for-profit entity, is the Group’s passionate commitment to empower sustainable change. 

About Seven Stars Legal

Seven Stars Legal is a specialist litigation finance provider focused on high-volume, precedent-based UK consumer claims. Founded by a team with over GBP 380 million in litigation finance experience, the company provides institutional investors with access to uncorrelated, asset-backed returns through secured lending to regulated UK law firms. Seven Stars has funded over 56,000 claims since 2022, maintaining a zero-default track record through its multi-layered security framework and AI-enhanced due diligence processes