Big global banks rock to the stock market after money laundering investigation

Big global banks rock to the stock market after money laundering investigation

Paris | HSBC, Deutsche Bank, JPMorgan Chase … These big names in finance were abused on the stock market Monday, after the revelations of a consortium of journalists who accuse them of having allowed large-scale dirty money laundering.

In Frankfurt, Deutsche Bank finished down 8.76%. Standard Chartered, also in the spotlight, dropped 5.82% in London at the end of the session.

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In Hong Kong, HSBC hit its lowest in 25 years, falling 5.33%. Besides the fact that the group was cited by the investigation of the consortium of journalists, it could face sanctions from Beijing as part of retaliatory measures against certain foreign countries.

Also cited in the case, ING bank plummeted 9.27% in Amsterdam. According to reports from the Dutch press, the bank's subsidiary in Poland has helped clients send suspicious funds outside of Russia for years.

The French bank Societe Generale is also targeted by the investigation, which accuses it of a lack of transparency vis-à-vis certain customers of its Swiss subsidiary SGPB. Its share lost 7.66% in Paris.

The shock wave was felt across the Atlantic: mid-session on Wall Street, the giant JPMorgan Chase dropped 4.08%. In its wake, Bank of America dropped 3.89%, while Morgan Stanley and Wells Fargo fell 4.5% and 5%.

In its survey conducted by 108 international media from 88 countries, the International Consortium of Investigative Journalists (ICIJ) denounces the deficiencies in the regulation of the sector.

Dirty money

The “FinCEN Files” investigation is based on thousands of “Suspicious Activity Reports” (SARs) sent to the US Treasury Financial Police (FinCen) by banks around the world, but “kept out of the office. public view ”. According to the ICIJ, astronomical amounts of dirty money have passed through the world's largest banking institutions for years.

These documents relate to 2,000 billion dollars of transactions, between 1999 and 2017. It would be money coming from drugs and criminal acts or even misappropriated fortunes from developing countries.

The investigation points in particular to five major banks – JPMorgan Chase, HSBC, Standard Chartered, Deutsche Bank, and Bank of New York Mellon – accused of having continued to transit funds from suspected criminals, even after having been prosecuted or convicted of financial misconduct.

The suspicious activity reports, on which the journalists of the consortium relied, “are not declarations of crime or fraud, but alert to potential cases of economic crime”, argues UK Finance, the finance lobby British, in a statement sent to AFP.

“It is simply a report to the supervisory authorities. (…) Additional activities may arise and present no suspicion or on the contrary confirm the original suspicion. (…) The supervisory authorities can also ask a financial institution to maintain the customer relationship in order to allow more in-depth investigations ”, also highlights UK Finance.

“Well-known” information

For its part, HSBC presents the accusations of the ICIJ as old and prior to an agreement reached on the subject in 2012 with the US Department of Justice. She also says she has since strengthened her capacity to fight financial crime.

In a statement, Deutsche Bank assured that the consortium's revelations were in fact information “well known” to its regulators and said it had “devoted significant resources to strengthening its controls”.

ING for its part affirmed that it had ceased its relationship in 2018 with one of the incriminated companies for having collaborated with its Polish subsidiary, and that it was preparing to do the same with the second.

“Societe Generale strictly respects all the regulations of the countries in which the bank is established. (…) All the suspected cases that it detects are thus systematically declared to the competent authorities, these declarations comprising all the elements that the bank is able to communicate in accordance with local regulations ”, informed the establishment in a press release sent to AFP.

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