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HONG KONG: Shares of HSBC and Standard Chartered in Hong Kong tumbled on Monday after media reported that they and other banks moved large sums of allegedly illicit funds over nearly two decades despite red flags about the origin of the money. .
BuzzFeed and other media reports were based on leaked Suspicious Activity Reports (SARs) filed by banks and other financial firms with the U.S. Department of the Treasury’s Financial Crime Enforcement Network (FinCen).
The disclosures underscore the challenges for regulatory and financial institutions trying to stem the flow of dirty money despite billions of dollars in investments and sanctions imposed on banks in the last decade.
Shares of HSBC in Hong Kong fell as much as 4.4% to HK $ 29.60 on Monday morning, the lowest since May 1995, while StanChart fell as much as 3.8% to HK $ 35.80 , the lowest since May 25 this year.
The Hang Seng Index was down 0.4%.
HSBC and Standard Chartered, among other global banks, have paid billions of dollars in fines in recent years for violating US sanctions on Iran and anti-money laundering rules.
BuzzFeed News obtained more than 2,100 SARs, which in themselves are not necessarily proof of wrongdoing, and shared them with the International Consortium of Investigative Journalists (ICIJ) and other media organizations.
The files contained information on transactions worth more than US $ 2 trillion between 1999 and 2017, which the internal compliance departments of financial institutions identified as suspicious.
The ICIJ reported that the leaked documents were a small fraction of the reports filed with FinCEN.
HSBC and StanChart were among the five banks that appeared most frequently in the documents, the ICIJ reported.
SARs showed that banks often moved funds for companies that were registered in offshore havens, such as the British Virgin Islands, and did not know the ultimate owner of the account, according to the report.
Staff at major banks often used Google searches to find out who was behind large transactions, he said.
In a statement to Reuters on Sunday, HSBC said that “all information provided by the ICIJ is historical.”
The bank said beginning in 2012, “HSBC embarked on a multi-year journey to review its ability to combat financial crime in more than 60 jurisdictions.”
StanChart said in a statement: “We take our responsibility to fight financial crime very seriously and have invested substantially in our compliance programs.”
