CARY – Shares of some major banks are tumbling before the market open Monday following a report alleging those including JPMorgan, HSBC, Standard Chartered Bank, Deutsche Bank and Bank of New York Mellon continued to profit from illicit dealings with disreputable people and criminal networks despite being previously fined for similar actions.
According to the International Consortium of Investigative Journalists, leaked government documents show that the banks continued moving illicit funds even after U.S. officials warned they’d face criminal prosecutions if they didn’t stop doing business with mobsters, fraudsters or corrupt regimes.
Deutsche Bank, which operates a significant software and R&D center in Cary, issued a statement defending itself.
The statement:
“The fight against financial crime, money laundering and capital flight has been a priority for investigating authorities and financial institutions alike. The world’s leading financial institutions, including Deutsche Bank, have invested billions of dollars to more effectively support authorities in this effort. Naturally, this leads to increased detection levels.
“At Deutsche Bank we have devoted significant resources to strengthening our controls and we are very focused on meeting our responsibilities and obligations. This also includes implementing risk mitigants and, where appropriate, off-boarding customers and correspondent banking relationships.
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“The ICIJ has reported on a number of historic issues. Those relating to Deutsche Bank are well known to our regulators. The issues have already been investigated and led to regulatory resolutions in which the bank’s cooperation and remediation was publicly recognized. Where necessary and appropriate, consequence management was applied. To the extent that information referenced by the ICIJ is derived from SARs, it should be noted that this is information that is pro-actively identified and submitted by banks to governments pursuant to the law. SARs are alerts of potential issues, not proven facts.”
The consortium says the documents indicate that JPMorgan moved money for people and companies tied to the massive looting of public funds in Malaysia, Venezuela and the Ukraine. The bank also processed more than $50 million in payments over a decade for Paul Manafort, the former campaign manager for President Donald Trump, according to the documents, which are known as the FinCEN Files.
JPMorgan’s stock declined 4.4% in premarket trading.
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. Shares of Deutsche Bank dropped 7.7%.
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