Swedish banking group Swedbank sacked its chief executive Birgitte Bonnesen on Thursday after authorities searched its Stockholm headquarters as part of a money laundering investigation.

The Swedish bank is accused of misleading US investigators over transactions made by its clients linked to Mossack Fonseca, a Panamanian law firm, which is at the center of a global tax avoidance and money laundering scandal, according to Swedish public broadcaster SVT.

What we know so far

The group confirmed on Wednesday that its headquarters near Stockholm have been raided by Swedish authorities.

Swedbank said the developments had put pressure on the group to dismiss group chief Bonnesen from her position.

The Stockholm stock exchange has suspended trading in Swedbank shares — which had tumbled in value — until further notice.

Sweden's Economic Crime Authority is also conducting an independent probe into whether the bank breached insider trading regulations by informing 15 of its biggest shareholders of the scandal before SVT's report on it last month.

Swedbank said in a statement that "no individual or legal entity has been served suspicion of a crime."

The bank's reaction

"The developments during the past days have created an enormous pressure for the bank. Therefore, the board has decided to dismiss Birgitte Bonnesen from her position," Swedbank chairman Lars Idermark said on Thursday.

The bank has said it cannot comment on specific transactions or give information about clients because of client confidentiality.

Read more: Opinion: German finance minister, hands off the German banks!

Bonnesen had described Wednesday, the day of the raids, as a "tough day." She has repeatedly stressed her confidence in the bank's anti-money laundering procedures, adding that Swebank had reported suspicious transactions to authorities.

Baltic money laundering

Money laundering is suspected in relation to at least 40 billion Swedish crowns (3.8 billion euros, $4.3 billion) transferred between Swedbank and Danske Bank’s Estonian unit between 2007 and 2015.

Bonnesen oversaw the bank's anti-money laundering policy between 2009 and 2011, before going on to head the institution's Baltic operations.

It’s reported that some of the money flows were from family members of Russian President Vladimir Putin.

Read more: French court hands Swiss bank UBS multi-billion fine for tax evasion

Danske Bank was the first major bank to face questions when suspicions emerged over the origins of billions of euros that had flowed through the Estonian branch of Danske Bank.

Since then, a number of banks have been embroiled in the scandal, with Swedbank just the latest.

dv,rc/aw (AP, Reuters)

Every day, DW's editors send out a selection of the day's hard news and quality feature journalism. Sign up for the newsletter here.