Stig Vilhelmson, chief executive of Nordic investment bank and wealth manager Carnegie, resigned after Swedish regulators demanded sweeping management changes following a trading scandal earlier this year. The bank was also fined SEK50 million ($7.7 million), the maximum penalty. The Financial Supervisory Authority said a new chief executive should be found to replace Mr Vilhelmson and the entire board should step down, although it did not suspend the bank's licence, after its investigation found problems with internal controls. The scandal involved three Carnegie traders inflating dealing profits by SEK630 million between 2005 and 2007, leading the bank to overstate its profits and incur a SEK315 million write-down. Carnegie said Anders Onarheim, head of investment banking and Norwegian operations, had been appointed acting chief executive to replace Mr Vilhelmson. Carnegie's head of private banking, Lars Bjerrek, and Niklas Ekvall, the asset management head, left the company in July. Chairman Christer Zetterberg has said he will not seek re-election at the bank's annual meeting next year. Meanwhile Karin Forseke, the Swedish government's special advisor on its privatisation programme, has also resigned. She was chief executive of the bank for part of the time when the scandal occurred. Her government position had been under threat since publication of the FSA's report last week. Ms Forseke's departure has cast a shadow over the Swedish government's multi-billion dollar privatisation programme. It is under pressure to sack Carnegie as an advisor on sales of its stakes in state-owned companies. Potential acquirers have also started circling the weakened bank with a view to a possible takeover. ABG Sundal Collier, the Norwegian investment bank, and Glitnir, the Icelandic bank, have both acquired strategic stakes in Carnegie in the wake of the FSA's report, but have not commented about their intentions. The FSA is reporting Carnegie's previous auditor, KPMG, as well as the auditor commissioned by itself, to the Committee for the Authorisation of Public Accountants. Carnegie, which said that customer-related business areas are unaffected by the regulatory actions, employs 1,100 people in eight countries including Sweden, Norway, the UK, Switzerland, Luxembourg and the US.