BANKS SLIDE ON REPORT OF LAUNDERING
Leaked documents show institutions moved illicit funds after warnings
The financial sector was hit hard Monday following a report alleging that a number of banks, Jpmorgan, HSBC, Standard Chartered Bank, Deutsche Bank and Bank of New York Mellon among them, have continued to profit from illicit dealings with disreputable people and criminal networks despite previous warnings from regulators.
According to the International Consortium of Investigative Journalists, leaked government documents show that the banks continued moving illicit funds even after being warned of poten3 tial criminal prosecutions. The documents were obtained by Buzzfeed News and shared with the ICIJ.
The report compounded a massive sell-off across global markets because of gloom and doom over COVID-19 infections and the economic damage from the pandemic.
The consortium reported that documents indicate that Jpmorgan moved money for people and companies tied to the massive looting of public funds in Malaysia, Venezuela and the Ukraine. The bank also processed more than $50 million in payments over a decade for Paul Manafort, the former campaign manager for President Donald Trump, according to the documents, which are known as the FINCEN Files.
Shares of JP Morgan tumbled percent.
The consortium’s investigation found that the documents identify more than $2 trillion in transactions between 1999 and 2017 that were flagged by financial institutions’ internal compliance officers as possible money laundering or other criminal activity, and $1.3 trillion of that activity took place at Deutsche Bank. Shares of Deutsche Bank dropped 8.3 percent.
Deutsche Bank has been under scrutiny for years. The bank, based in Frankfurt, Germany, agreed to pay the state of New York $150 million to settle claims that it broke compliance rules in its dealings with the sex offender Jeffrey Epstein. Epstein killed himself last August in a Manhattan federal jail while awaiting trial on sex trafficking charges.
German newspaper Sueddeutsche Zeitung reported last year that Deutsche Bank gave expensive gifts to senior Chinese officials and hired family members of Chinese elite as it was trying to establish itself as a major player in China’s financial industry.
The London Bank HSBC, Europe’s largest, acknowledged in 2012 that it had laundered at least $881 million for Latin American drug cartels. However, according to the report, HSBC continued to manage money for shady clients, including suspected Russian money launderers and a Ponzi scheme under investigation in multiple countries.
Shares of HSBC, already down more than 50 percent this year, slumped to levels not seen in more than two decades, shedding 5.5 percent Monday on Wall Street.