On September 21st, European and American bank stocks fell collectively, HSBC Holdings PLC fell 5.5%, Lloyds fell 5%, JPMorgan Chase & Co fell more than 3%, Deutsche Bank fell nearly 8%, Bank of New York Mellon fell nearly 3%, and Barclays fell 5%.

A suspicious transaction investigation report on big international banks came to light over the weekend, saying that HSBC, JPMorgan Chase & Co, Deutsche Bank and other banks were suspected of transferring huge amounts of suspicious funds.

Money laundering, conniving at a Ponzi scheme. With the leak of secret documents from the US Treasury, a big melon surfaced.

According to a number of foreign media reports, secret documents show that HSBC, knowing that its customers are suspected of a "Ponzi scheme", still allowed it to transfer 80 million US dollars (540 million yuan) of assets from its HSBC account in the United States to its Hong Kong account. Among these documents, apart from HSBC, the most frequent banks are Standard Chartered, JPMorgan Chase & Co, Deutsche Bank and Bank of New York Mellon. The scandal has attracted people's attention with the leak of secret documents from the US Treasury.

HSBC Holdings PLC shares fell sharply on Sept. 21, local time, after the HSBC scandal. By the end of the day, they were down 5.33% at HK $29.30 per share, an 11-year low. It is worth mentioning that HSBC shares have plummeted 50.39% so far this year, halving.

HSBC shares plunged to an 11-year low after another scandal

According to a leaked document called FinCEN, the bank's "suspicious activity report", HSBC allowed customers to transfer $80 million (540 million yuan) of assets from their HSBC accounts to Hong Kong accounts between 2013 and 2014, knowing that customers were suspected of a Ponzi scheme, the BBC reported on Sept. 20.

Of the 2657 documents leaked by FinCEN, 2100 were suspicious activity reports (SAR). According to the regulations, if the bank suspects that the customer is engaged in illegal activities, it will submit the report to the relevant departments. In October 2013, HSBC submitted its first suspicious activity report, showing that more than $6 million had been transferred to the Hong Kong account of the fraud suspect. In February 2014, HSBC submitted a second suspicious activity report involving more than $15 million, calling it a "potential Ponzi scheme". The following month, HSBC submitted a third report, involving $9.2 million.

Lawyers for deceived investors said that according to the law, if a bank detects a crime, it should freeze client funds. HSBC should have taken action to close the fraudsters' accounts as soon as possible. But it is clear that HSBC did not.

The documents also show that HSBC was fined $1.9 billion in the United States for money laundering, which HSBC promised to crack down on at the time.

The international federation of investigative journalists who obtained the outflow reports said the leaked reports were only a small part of the many reports submitted by financial institutions to the FinCen. Among these reports, the five most frequent banks are HSBC, Standard Chartered, JPMorgan Chase & Co, Deutsche Bank and Bank of New York Mellon.

On the incident, HSBC issued a statement saying: "We do not comment on suspicious activity reports." It also pointed out that since 2012, HSBC has been committed to reforming its ability to crack down on financial crime for many years, covering more than 60 jurisdictions. "

Standard Chartered Bank issued a statement saying: "We have fulfilled our responsibility of cracking down on financial crime extremely seriously and have made full investment in compliance projects." However, Standard Chartered also said in a statement, "the current fact is that there will always be attempts to launder money and evade sanctions; it is the responsibility of banks to establish effective screening and regulatory mechanisms to protect the global financial system." "

$80 million "Ponzi scheme"

According to foreign media reports, the $80 million involved a "Ponzi scheme", code-named WCM777, which was led by Xu, a Chinese man in the United States. The so-called Ponzi scheme means that fraudsters recruit members or investors in a hierarchical manner to participate in "high interest and high return" investment schemes.

Mr Xu once claimed that the Wantong Investment Bank (World Capital Market), which he runs, could make a 100 per cent profit on clients' investments in 100 days. In fact, he is operating a Ponzi scheme targeting poor communities in the United States, Colombia and Peru, as well as victims in other countries.

As early as September 2013, California regulators told HSBC that it was investigating WCM777 and alerted investors to fraud. HSBC did spot suspicious transactions through its trading system. But it was not until April 2014 that HSBC closed its WCM777 account in Hong Kong following allegations from US financial regulators.

A few months before WCM777 was investigated, HSBC dodged US criminal charges against Mexican drug lords for money laundering, according to leaked documents from FinCEN. Between 2011 and 2017, HSBC found more than $1.5 billion in suspicious transactions through its accounts, of which about $900m was related to various criminal activities. However, the suspicious activity report submitted by HSBC did not include key facts about customers, the ultimate beneficiary owner of the account and the source of the funds.

A number of major international banks are suspected of transferring suspicious funds?

The documents also show that HSBC was fined $1.9 billion (12.8 billion yuan) by the U.S. government for money laundering just before allowing fraudsters to transfer assets, and promised to crack down on such practices. Also exposed as suspected of money laundering were JPMorgan Chase & Co Bank, Standard Chartered Bank, Deutsche Bank and Bank of New York Mellon. Buzzfeed, the US news portal that first broke the news, pointed out that the US government had not stopped the illegal activities of the above-mentioned banks.

In recent years, HSBC and Standard Chartered Bank have paid billions of dollars in fines for violating U. S. sanctions against Iran and anti-money-laundering regulations.

In the United States, financial institutions must report suspicious transactions to the Financial crimes Enforcement Network (Financial Crimes Enforcement Network, abbreviated as FinCen) under the U.S. Treasury. According to the law, when the FinCen believes that there is something wrong with the transaction, it will ask the bank to suspend the transaction.

A number of overseas media reported that more than 2100 "suspicious activity reports" submitted by banks to the FinCen were leaked. These outflow reports show that although the internal compliance departments of these financial institutions have identified some transactions as suspicious over the past two decades, financial institutions have assisted in the execution of these suspicious transactions.

The leaked reports include transactions deemed questionable by the internal compliance departments of financial institutions between 1999 and 2017, involving more than $2 trillion.

According to the report, these banks often transfer money for companies registered in tax havens such as the British Virgin Islands and do not know who the ultimate owner of these accounts is. Foreign media reports also cited some of the transactions mentioned in the report, such as JPMorgan Chase & Co's services to individual and corporate clients in Venezuela, Ukraine and Malaysia who are likely to engage in corruption. HSBC has assisted in the trading of funds suspected of a Ponzi scheme, while Deutsche Bank has assisted in transactions related to Ukrainian billionaires.