Skip to main content
Updated:
Original:

JPMorgan and Deutsche Bank Named in Money Laundering Report

Bank shares slide following a report that says financial institutions defied money laundering crackdowns.

Bank shares were reeling Monday morning following a report charging that JPMorgan Chase  (JPM) - Get JPMorgan Chase & Co. (JPM) Report, Deutsche Bank  (DB) - Get Deutsche Bank AG Report and other financial services companies had defied money laundering crackdowns even after being fined by U.S. authorities.

The report by the International Consortium of Investigative Journalists found five global banks moved "staggering sums of illicit cash for shadowy characters and criminal networks that have spread chaos and undermined democracy around the world."

The report cited documents leaked by BuzzFeed News that identified 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.

The SPDR Financial Select Sector ETF  (XLF) - Get Financial Select Sector SPDR Fund Report was down 3.8% to $23.60, while JPMorgan Chase was off 4.3%, and Deutsche Bank was down 9.7%. 

The other banks named in the report also were falling, with HSBC Holdings off 6.4%, the Bank of New York Mellon  (BK) - Get Bank of New York Mellon Corporation Report down 5.6%, and Standard Chartered  was down 5.8%

JPMorgan allegedly moved money for people and companies tied to the massive looting of public funds in Malaysia, Venezuela and Ukraine, the report said, according to the documents known as the FinCEN Files, the result of an investigation by more than 100 news organizations in 88 countries.

TheStreet Recommends

JPMorgan also processed more than $50 million in payments over a decade, the records showed, for Paul Manafort, the former campaign manager for President Donald Trump, the report said.

Standard Chartered, Bank of New York and Barclays (BCS) - Get Barclays PLC Sponsored ADR Report flagged more than $20 billion of suspicious activity in the files obtained by the consortium.

 A spokesman for Bank of New York told Bloomberg the bank “takes its role in protecting the integrity of the global financial system seriously, including filing Suspicious Activity Reports.” 

Barclays said in a statement to Buzzfeed that it invests significant resources in detecting and flagging suspicious activity.

Some of the secret records were requested as part of U.S. congressional investigations into Russian interference in the 2016 U.S. presidential election, BuzzFeed News reported, while others were gathered by FinCEN following requests from law enforcement agencies.

FinCEN and its parent, the Treasury Department did not respond to the consortium's questions about the documents.

Other bank stocks were also falling Monday, including Citigroup  (C) - Get Citigroup Inc. Report, which was down 3.2%, Bank of America  (BAC) - Get Bank of America Corp Report, which was off 4.3%, and Wells Fargo  (WFC) - Get Wells Fargo & Company Report, which was sliding 4.9%.