On Monday, HSBC and Standard Chartered’s Hong Kong shares fell after media reports related to moving illicit funds over nearly 20 years even after various red flags regarding the origin of the money.
Various media reports were completely based on the leaked suspicious activity reports filed by various financial institutions with the U.S Department of Treasury’s Financial Crimes Enforcement Network.
These revelations eventually underscore the challenges for regulatory and financial institutions trying to stop the flow of allegedly dirty money despite billions of dollars of investments and imposing heavy penalties on banks during the last decade.
HSBC’s shares in Hong Kong fell as much as 4.4% to HK$29.60 on Monday morning, which is lowest since 1995 May. Whereas Standard Chartered fell around 3.8% to as low as HK$35.80, which is lowest since 25th May this year.
These two banks have already paid billions of dollars in fines due to the violation of anti-money laundering rules and U.S sanctions on Iran.
The leaked suspicious activity report contains various information regarding transactions of more than $2 trillion between the years 1999-2017. These transactions were flagged suspicious by the internet compliance departments of financial institutions. According to the document, HSBC and Standard Chartered are amongst the five banks that appeared most.
Also, according to the report these banks often used to move these funds for companies that were registered in various offshore heavens, including the British Islands, without even knowing the about the ultimate owner of the account.
However, HSBC said in a statement, “all of the information provided by the ICIJ is historical.” It also added, “HSBC embarked on a multi-year journey to overhaul its ability to combat financial crime across more than 60 jurisdictions.”
On the other hand, Standard Chartered said, “We take our responsibility to fight financial crime extremely seriously and have invested substantially in our compliance programs.”
