HSBC, Deutsche Bank and ING were hammered Monday

HSBC, Deutsche Bank and ING were hammered Monday

Shares in major banks such as HSBC, Deutsche Bank and ING were hammered Monday following allegations 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 about $2.0 trillion took place at a host of banks between 1999 and 2017.

Five banks — JPMorgan Chase, HSBC, Standard Chartered, Deutsche Bank, and Bank of New York Mellon — were specifically accused of continuing to move assets of alleged criminals, even after being fined for earlier failures to stem flows of dirty money.

In Frankfurt, Deutsche Bank’s stock gave up 8.8 percent while Standard Chartered, another bank named in the international probe, was down by 5.8 percent in London.

Earlier in Hong Kong, HSBC shares fell to their lowest level in 25 years, closing with a loss of 5.3 percent.

In addition to being named in the investigation, a report said HSBC might be on Beijing’s “unreliable entity list” as part of a tit-for-tat stand-off with several western countries.

The Dutch bank ING was also named in the probe, and its shares fell by 9.3 percent in Amsterdam.

Dutch media reported that an ING subsidiary in Poland had helped clients get suspect funds out of Russia for several years.

“Profits from deadly drug wars, fortunes embezzled from developing countries, and hard-earned savings stolen in a Ponzi scheme were all allowed to flow into and out of these financial institutions, despite warnings from the banks’ own employees,” the investigation found.

It was led by more than 100 international media outlets from 88 different countries and is based on over 2,000 suspicious activity reports (SARs) submitted to the US Treasury Department’s financial law enforcement agency, FinCEN, by banks.

That said, “SARs are not crime or fraud reports, or evidence of wrongdoing, but alerts to potential instances of economic crime,” noted UK Finance, a sector lobby group, in a statement sent to AFP.

“Law enforcement may sometimes request firms keep a client relationship ongoing to support further investigations,” the group added.

– ‘Hollow’ banking safeguards? –

In its introduction to the report, BuzzFeed News nonetheless said: “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.”

HSBC told the investigation team it has always met its legal duties on reporting suspicious activities.

A bank statement said it had been overhauling its ability to combat financial crime and underscored that “HSBC is a much safer institution than it was in 2012,” when it signed an accord with the US Justice Department on the issue.

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 authorities in this effort.”

The bank was “very focused on meeting our responsibilities and obligations,” the statement said.

ING said it had stopped working with one of the suspected enterprises in 2018 and was preparing to cut off relations with a second.

A shock wave impacted European banks in general Monday, and shares in Societe General, also named in the report, plunged by 7.7 percent in Paris.

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S. Jack Heffernan Ph.D. Funds Manager at HEFFX holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.

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