Big banks let $2 trn in illicit funds move around world: FinCEN Files

The top two banks are Deutsche Bank, which disclosed $1.3 trillion of suspicious money in the files, and JPMorgan, which disclosed $514 billion
A cache of leaked documents suggests increased scrutiny on suspect transactions at banks does little to stem the flow of trillions of dollars linked to suspicious activity. Shares of the biggest global lenders fell Monday.


A new investigation by the International Consortium of Investigative Journalists says JPMorgan Chase, Deutsche Bank and HSBC Holdings were among the global banks who “kept profiting from powerful and dangerous players” in the past two decades even after the US imposed penalties on these financial institutions.


The documents detailed 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, the report said. Almost 90 financial institutions appear in the roughly 2,100 documents obtained, a fraction of the 2 million reports filed annually.


Deutsche Bank dropped as much as 8.6 per cent in Frankfurt, the most since April, while HSBC earlier slumped in Hong Kong trading to its lowest share price in a quarter of a century. JPMorgan shares dropped 3.1 per cent at 9.46 am in New York, as the S&P 500 Financials index fell 2.3 per cent. Banks moved money for people or entities they couldn’t identify, and in many cases failed to file the required suspicious activity reports until years afterward, according to the investigation released over the weekend. The report, based on leaked documents obtained by BuzzFeed News and shared with the consortium, said that in some cases the banks kept moving illicit funds after receiving warnings from US officials.


The top two banks are Deutsche Bank, which disclosed $1.3 trillion of suspicious money in the files, and JPMorgan, which disclosed $514 billion, the analysis found. Other lenders include HSBC, Standard Chartered and Bank of New York Mellon, it said.


 HSBC’s shares in Hong Kong and Standard Chartered's in London fell on Monday to their lowest since at least 1998 after media reports that they and other banks, including Barclays and Deutsche Bank, moved large sums of allegedly illicit funds over nearly two decades despite red flags about the origins of the money.


HSBC shares in London fell as much as 5 per cent to 288 pence, their lowest intraday level since 2009, after the lender's Hong Kong shares earlier touched a 25-year low. The stock has now nearly halved since the start of the year. In reaction to the report, Deutsche Bank said ICIJ raised “a number of historic issues” and those related to the bank are “well known” to regulators. “The issues have already been investigated and led to regulatory resolutions in which the bank’s cooperation and remediation was publicly recognized,” it said.


That firm’s former chief executive officer, John Cryan, in 2016 summed up the industry’s unique role, with all the challenges that brings.

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