On Wednesday, February 7, 2024, over 130 institutional shareholders served ING Groep NV (“ING”) and certain former directors of ING with a writ of summons claiming over €600 million in damages caused by ING’s failure to properly inform the market of material information relating to ING Bank N.V.’s (“ING Bank”) alleged corrupt practices and violation of anti-money laundering laws. This lawsuit follows the €775 million fine ING paid to the Netherlands Public Prosecution Service (Openbaar Ministerie) (the “NPPS”) in 2018 for violations of anti-money laundering laws.
The lawsuit is based upon facts revealed in several investigations carried out by authorities into ING Bank’s compliance with its obligations under the Anti-Money Laundering and Counter Terrorism Financing Act (Wet ter voorkoming van witwassen en financieren van terrorisme, “Anti-money Laundering and Counter-terrorism Financing Act”) over an extended period from at least 2010 to 2018.
In detail, as early as 2010, following ING’s implementation of a compliance improvement program, internal reports of ING Bank’s Corporate Audit Services (“CAS”) revealed that its financial crime and customer due diligence policies had severe structural problems. However, it wasn’t until March 13, 2017, that ING acknowledged, for the first time, that ING Bank was the subject of criminal investigations by Dutch authorities in relation to its AML compliance failures relating to money laundering and certain corrupt practices. ING also revealed at that time that it was under investigation from U.S. authorities.
On March 21 and 22, 2017, the Dutch financial newspaper, Het Financieele Dagblad (the “FD”), reported on ING’s admission and disclosed that ING Bank was suspected of being involved in international corruption, money laundering, breach of customer due diligence rules, and failure to disclose unusual transactions. The NPPS also revealed at this time that part of its investigation focused on ING Bank’s role in bribes paid by telecom company VimpelCom to an Uzbek government official and disclosed that the Dutch Fiscal Information and Investigation Service (Fiscale inlichtingen- en opsporingsdienst) raided ING Bank's premises in March 2016 in connection with these suspicions, all of which ING previously failed to report to investors. This news and the possibility of a “significant” fine, sent ING’s share price down by as much as 4.02% to close at €13.82 on March 22, 2017, wiping out approximately €2 billion from ING’s market capitalization, causing significant losses for ING investors.
On September 4, 2018, the NPPS issued a press release stating that ING Bank had accepted a €775 million fine as part of a settlement relating to accusations of having violated provisions of the Anti-money Laundering and Counter-terrorism Financing Act for many years and on a structural basis. ING was also accused of culpable money laundering (schuldwitwassen) as it failed to prevent client accounts from being used to launder hundreds of millions of Euros over the period between 2010 and 2016. Following this press release and a press release of ING on the same subject, both issued before the market opened on September 4, 2018, ING’s share price fell 2.12% from the previous day to close at €11.55. In the following days, the share price continued to decrease amid widespread attention to the settlement with the NPPS. Overall, from the close of trading on September 3, 2018, to the close of trading on September 7, 2018, ING’s share price fell by 5%, representing a total market capitalization loss of €2.28 billion.
Following the settlement between the NPPS and ING Bank, additional disclosures revealed the true scope of ING’s failures as well as its subsequent cover-up to maintain its public image and inflated stock price value. As a result of these revelations, on April 23, 2019, ING’s shareholders voted against a proposal to discharge ING’s, now former, executive and supervisory board directors from liability against ING for their duties performed in the 2018 financial year.
While the NPPS reached a settlement with ING Bank, the fine paid does not compensate investors which were directly harmed by ING’s actions. DRRT, an international global loss recovery and litigation financing firm, and the Dutch law firm Finch Dispute Resolution are now working for investors to hold ING and its culpable former officers and directors legally and economically accountable for their failure to timely inform the market of ING’s illegal, corrupt practices. “ING’s clear and intentional disregard for proper banking practices not only led to significant reputational damage to ING and the Dutch banking system but its lack of transparency to shareholders was also the direct cause of hundreds of millions in losses suffered by ING’s investors. Banks that fail to implement strong AML/KYC practices should not only be held accountable for the illegal and immoral activities that are the result of such practices but they must also be held accountable to their shareholders,” said DRRT’s Managing Partner, Joseph Gulino.
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About DRRT: DRRT is a boutique international law firm, litigation funder, and class action claims filing service provider, assisting the world’s largest institutional investors in their global loss recovery efforts. DRRT focuses on the recovery of losses resulting from misstatements, misrepresentations, or fraud by public companies and engages in securities litigation, arbitration, and other alternative dispute resolution methods around the world. For 20 years, DRRT has successfully recovered billions for investors, such as in the Ageas/Fortis and Steinhoff actions in the Netherlands, the Royal Bank of Scotland matter in England and the Olympus case in Japan. DRRT has offices in Miami, Frankfurt, London, and Paris.
About Finch Dispute Resolution: Finch is an Utrecht-based dispute resolution boutique firm with a strong focus on mass claims and collective redress. The firm’s practice covers a broad spectrum of corporate and commercial disputes.