HSBC HK shares drop to lowest since 1995, StanChart falls after 'FinCEN' leak

HSBC HK shares drop to lowest since 1995, StanChart falls after 'FinCEN' leak
-- HSBC shares in Hong Kong down up to 4.4%

-- StanChart down up to 3.8%

-- Falls follow reports on movements of allegedly illicit funds

HSBC and Standard Chartered's Hong Kong shares dropped on Monday after media reports that they and other banks moved large sums of allegedly illicit funds over almost two decades despite warning flag about the origins of the amount of money.

BuzzFeed and other media reports were predicated on leaked suspicious activity reports (SARs) filed by banks and other financial organizations with the US Department of Treasury's Financial Crimes Enforcement Network (FinCen).

The revelations underscore challenges for regulatory and financial institutions trying to stop the flow of dirty money despite vast amounts of dollars of investments and penalties imposed on banks previously decade.

HSBC shares in Hong Kong fell around 4.4% to HK$29.60 on Monday morning, the cheapest since May 1995, while StanChart dropped up to 3.8% to HK$35.80, the cheapest since May 25 this year.

The Hang Seng Index was down 0.4%.

HSBC and Standard Chartered, among other global banks, have paid vast amounts of dollars in fines recently for violating US sanctions on Iran and anti-money laundering rules.

More than 2,100 SARs, which are in themselves not necessarily proof wrongdoing, were obtained by BuzzFeed News and distributed to the International Consortium of Investigative Journalists (ICIJ) and other media organisations.

The files contained details about a lot more than $2 trillion worth of transactions between 1999 and 2017, that have been flagged by internal compliance departments of finance institutions as suspicious.

The ICIJ reported the leaked documents were a little fraction of the reports filed with FinCEN.

HSBC and StanChart were among the five banks that appeared frequently in the documents, the ICIJ reported.

The SARs showed that banks often moved funds for companies which were registered in offshore havens, including the British Virgin Islands, and didn't know the best owner of the account, the report said.

Staff at major banks often used Google searches to learn who was behind large transactions, it said.

In a statement to Reuters on Sunday, HSBC said "each of the information supplied by the ICIJ is historical." The bank said as of 2012, "HSBC embarked on a multi-year journey to overhaul its capability to combat financial crime across a lot more than 60 jurisdictions."

StanChart said in a statement, "We take our responsibility to fight financial crime extremely seriously and also have invested substantially inside our compliance programmes." 
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