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What FinCen Files Leak Is All About

Aditya Raghunath
·2 mins read

Scrutiny of leaked Suspicious Activity Reports (SARs) filed with the United States Department of Treasury revealed that many financial entities could have aided money launderers and criminals.

The report unearthed and published by BuzzFeed claims that in almost two decades between 1999 to 2017, financial entities processed over $2 trillion worth of suspicious transactions. Over 2,100 SAR filings with the Financial Crimes Enforcement Network (FinCen) were shared with the International Consortium of Investigative Journalists (ICIJ) and media outlets.

What Happened: SARs aren't by themselves proof of a bank's guilt. According to Reuters, a bank is required to file SARs documentation within 60 days of detecting a suspicious or reportable transaction made by any of its clients. 

However, documents shared with the ICIJ made it clear that many such transactions weren’t reported until years after settling them.

Some of the names in the expose include HSBC Holdings Plc (NYSE: HSBC), JPMorgan Chase & Co (NYSE: JPM), Deutsche Bank AG (NYSE: DB), Standard Chartered Plc (OTC: SCBFF), and Bank of New York Mellon Corp (NYSE: BK).

Why Does It Matter: Although banks have claimed adherence to legal duties, it is a matter of concern when globally well-known banking institutions are accused of providing services to money launderers & mob bosses, Ponzi schemes, and drug traffickers. 

BBC reported that despite being informed of an investigation against a Ponzi Scheme in September 2013, HSBC continued to service the account.

The account was shut after charges were filed in April 2014. BBC also claimed that JPMorgan supposedly moved close to $1.02 billion funds of a Russian mob boss over a five-year period.

HSBC shares tanked more than 3% in Hong Kong after the FinCen files leak to HKD 29.60, the lowest since 1995, according to Bloomberg.

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