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$2 trillion scandal in the banking sector

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Miguel A. Rodriguez
Miguel A. Rodriguez
22 septiembre 2020
Major banks believed to have moved illicit funds

A new scandal emerged at the beginning of the week, which has culprits some of the world's largest banks. According to various documents that have been obtained by BuzzFeed and shared with the International Consortium of Investigate Journalists (ICIJ) and multiple media outlets, more than $2 trillion worth of transactions has been made between 1999 and 2017. The documents have been initially filed with the US Department of Treasury's Financial Crimes Enforcement Network (FinCen).

Among the named #banks are HSBC, Barclays, Standard Chartered, Deutsche Bank, JPMorgan Chase & Co, Commerzbank, and Bank of New York Mellon Corp. Deutsche Bank seems to have facilitated suspicious transactions worth $1.3 trillion, while JPMorgan is guilty of transactions of $514 billion. 

The ICIJ report showed that the banks transferred funds for companies that were registered in the British Virgin Islands, and many other offshore havens. JPMorgan has processed transactions linked to corrupt people and companies from Venezuela, Malaysia, and Ukraine. HSBC moved money from a Ponzi scheme, and Deutsche Banks was linked to a Ukrainian billionaire.  

For Deutsche Bank, the problem has been solved both at an internal level and by regulators, according to the former. The mentioned incidents "have already been investigated and led to regulatory resolutions in which the bank's cooperation and remediation were publicly recognized. Where necessary and appropriate, consequence management was applied." Besides the European regulatory measures, in 2015, Deutsche Bank got fines of $258 million. It was found that it made businesses and facilitated transactions with US sanctioned countries such as Libya, Sudan, Iran, and Myanmar. However, the report from FinCen shows that even after the fine, Deutsche continued to move funds. 

From HSBC’s point of view, the information that has been brought to light by ICIJ is ancient history, and the events that happened in 2012 led to a "much safer institution," "Starting in 2012, HSBC embarked on a multi-year journey to overhaul its ability to combat financial crime across more than 60 jurisdictions." 

JPMorgan Chase stated that it plays a role in fighting money-laundering by having a close relationship with the US government "so that law enforcement can combat financial crime, and have thousands of people and hundreds of millions of dollars dedicated to this important work."

Following the news, HSBC stock price lost 5.5%, reaching a 25-year low. Deutsche Bank #traded 8% lower, while JPMorgan fell more than 3%.

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Sources: cnbc.com, reuters.com, investing.com


Esta información/estudio preparada por Miguel A. Rodriguez  no tiene en cuenta los objetivos específicos de inversión, la situación financiera o las necesidades particulares de una persona. El analista de estudios es, principalmente, responsable del contenido de este informe de estudio, en parte o en su totalidad, certifica que los puntos de vista sobre las compañías y sus valores expresados en este informe reflejan con exactitud sus puntos de vista personales, y como consecuencia, toda persona que actúe basándose en ellos lo hace bajo su propio riesgo.El estudio proporcionado no constituye los puntos de vista de KW Investments Ltd, ni es una invitación a invertir con KW Investments Ltd El analista de estudios certifica, además, que ninguna parte de su remuneración ha sido, es o será directa o indirectamente relacionada con recomendaciones o puntos de vista específicos expresados en este informe.El analista de estudios no está contratado por KW Investments Ltd Le animamos a buscar asesoramiento con un consejero financiero independiente con respecto a la idoneidad de la inversión, en virtud de otra participación separada, cuando considere oportuno que es conforme con sus objetivos específicos de inversión, su situación financiera o, sus necesidades financieras particulares antes de comprometerse a invertir..Las leyes de la República de Seychelles rigen cualquier reclamación relacionada o que surja por el contenido de la información/análisis proporcionado.

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Miguel A. Rodriguez
Miguel A. Rodriguez
Autor financiero

Miguel worked for major financial institutions such as Banco Santander, and Banco Central-Hispano. He is a published author of currency trading books.