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PARIS: Shares of major banks such as HSBC, Deutsche Bank and ING were hit on Monday (September 21) following accusations that they had handled huge sums of dirty money for almost 20 years.
An investigation by Buzzfeed News and the International Consortium of Investigative Journalists (ICIJ) alleges that potentially dubious transfers worth around US $ 2.0 trillion were made between 1999 and 2017 at a number of banks.
Five banks – JPMorgan Chase, HSBC, Standard Chartered, Deutsche Bank and Bank of New York Mellon – were specifically charged with continuing to move assets from suspected criminals, even after being fined for previous failures to contain dirty money flows.
In Frankfurt, Deutsche Bank shares fell 8.8 percent, while Standard Chartered, another bank mentioned in the international investigation, fell 5.8 percent in London.
Previously in Hong Kong, HSBC shares fell to their lowest level in 25 years, closing down 5.3 percent.
In addition to being named in the investigation, a report said HSBC could be on Beijing’s “untrustworthy entity list” as part of a tit-for-tat showdown with several Western countries.
Dutch bank ING was also mentioned in the investigation, and its shares fell 9.3 percent in Amsterdam.
Dutch media reported that an ING subsidiary in Poland had been helping clients get suspicious funds out of Russia for several years.
“Profits from deadly drug wars, embezzled fortunes from developing countries, and hard-earned savings stolen in a Ponzi scheme were allowed to flow to and from these financial institutions, despite warnings from the employees of the banks, “the investigation found.
It was run by more than 100 international media outlets from 88 different countries and is based on more than 2,000 Suspicious Activity Reports (SARs) submitted by banks to the financial law enforcement agency of the US Department of the Treasury.
That said, “SARs are not reports of crime or fraud, or evidence of irregularities, but alerts of possible cases of economic crime,” said UK Finance, an industry lobby group, in a statement sent to AFP.
“Law enforcement may sometimes request that companies maintain an ongoing customer relationship to support further investigations,” the group added.
‘HOLLOW’ BANK SAFEGUARDS?
However, in its introduction to the report, BuzzFeed News said: “These documents, compiled by banks, shared with the government, but hidden from public view, expose the vacuum of bank safeguards and the ease with which criminals can use them. have exploded. “
READ: MAS ‘closely studies’ reports on ‘FinCEN’ leak mentioning Singapore banks in suspicious transactions
HSBC told the investigation team that it has always complied with its legal obligations when reporting suspicious activity.
A bank statement said it had been reviewing its ability to fight financial crime, underscoring that “HSBC is a much safer institution than it was in 2012,” when it signed an agreement with the US Department of Justice on the matter.
A Deutsche Bank statement said the transactions in question were “well known to our regulators” and added that it invested “billions of dollars to more effectively support the authorities in this effort.”
The bank was “very focused on meeting our responsibilities and obligations,” the statement read.
ING said it had stopped working with one of the suspect companies in 2018 and was preparing to cut ties with a second one.
A shock wave hit European banks in general on Monday, and shares of Societe General, also mentioned in the report, fell 7.7% in Paris.
