Bank shares slide on reports of rampant money laundering

HSBC Hong Kong shares plunge to 1995 levels following 'FinCEN Files' leak

The documents - known as SARs - are not necessarily proof of wrongdoing.

The consortium's investigation found the documents identify 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 - including $514 billion at JPMorgan and $1.3 trillion at Deutsche Bank.

Policymakers, regulators and banks have long acknowledged fundamental flaws in the anti-money laundering system.

HSBC's shares dropped to their lowest value in 25 years on the Hong Kong stock exchange this morning, following reports that the bank had continued to allow fraudsters to transfer millions of dollars after HSBC had discovered the Ponzi scheme scam.

"These documents, compiled by banks, shared with the government, but kept from public view, expose the hollowness of banking safeguards, and the ease with which criminals have exploited them", wrote USA outlet Buzzfeed News, in the introduction of its report.

HSBC shares in Hong Kong fell by over 4% at one point and is now hovering under the $30 (£23.15) mark on Monday.

In terms of individual stock price action, Germany's United Internet lowered its outlook and fell more than 23% in initial trading, and Network International recently fell 21% to extend the slide.

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Mumbai, Sep 21 (IANS) Shares of HSBC and Standard Chartered in Hong Kong plummeted almost 3 per cent on Monday morning after reports suggested that they along with other banks allegedly moved large sums of illicit funds for almost two decades.

The report stated that warnings connected with the origin of the cash were intentionally disregarded as the banks moved funds over the previous twenty years.

The European banks index as a whole was reported about 4% down on Monday.

Numerous suspicious transactions were linked to companies incorporated in Britain or offshore British territories, prompting calls from action groups for tougher rules. They are required to file an SAR whenever handling funds that cause grounds for suspicion of criminal activity. JPMorgan said it has "thousands of people and hundreds of millions of dollars dedicated to this important work".

The UK government said it was working on reforms to its corporate registry system that will require more checks on company directors.

Global banks in the recent years have boosted investments in technology and staff to deal with tighter anti-money laundering and sanctions regulatory requirements across the world. Under the law, the banks need to know all the details of the client and if they are dealing with illicit money and can't leave it to enforcers to deal with the problem.

"Lots of banks are struggling with high false positive rates and the backlog (of existing cases)".

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