Investors demand €500 mil. from ING for not disclosing major anti-money laundering case

A group of angry investors are suing ING for compensation for concealing a money laundering scandal that ended in a 775 million euro settlement with the Dutch authorities in 2018. The 158 institutional investors are demanding a total of 500 million euros in compensation because they bought shares without knowing that ING did not have its anti-money laundering measures in order, Financieele Dagblad reports based on the summons handed to the bank on Wednesday.

The involved investors are financial institutions like banks, insurers, and asset managers from Europe and the United States. The American litigation financier DRRT is funding their claim, and lawyer Koen Rutten from the firm Finch is representing them.

The case stems from a fine ING received in 2018 for facilitating money laundering through inadequate checks. The bank settled with the Dutch Public Prosecution Service (OM) for 775 million euros. The OM had been investigating ING since 2016 for various money laundering scandals and the bank’s involvement in them.

According to the investors, ING should have made it clear much earlier that it had problems with complying with the anti-money laundering rules. ING repeatedly withheld important and stock price-sensitive information, they said, mentioning a sanction from the Dutch Central Bank (DNB) in 2015 and a critical report from the European Central Bank (ECB). They also believe ING misled investors by repeatedly stating in annual reports that the anti-money laundering checks met the requirements, even though the bank’s accountants had been raising doubts about that since 2010.

This is the first time shareholders are suing ING for damage caused due to the money laundering affair. The lawsuit also includes several former directors and supervisory directors, including former CEO Ralph Hamers.

ING told FD that it received the summons. “We disagree with the allegations and will defend ourselves against the claims,” a spokesperson told the newspaper. The spokesperson added that the bank follows the accounting rules for making provisions for damage claims.