Europe’s widening money laundering scandals took a new turn on Thursday as Dutch lender ABN Amro Bank disclosed a criminal probe over alleged failures to check on clients and report suspicious transactions.
Shares of the bank slumped to its lowest in more than three years and its bonds fell as investors assessed the financial impact on a lender that’s still trying to exit government ownership after a bailout. ABN Amro’s Dutch rival ING paid a record fine last year and acknowledged “serious shortcomings” in its efforts to prevent financial crime.
The Dutch probe adds to a series of money laundering cases that have engulfed lenders particularly in northern Europe, and highlighted weaknesses in the region’s efforts to fight the flow of illicit funds. Only this week, the former head of Danske Bank in Estonia, the unit at the centre of a €200bn (£177bn) money-laundering scandal, was found dead after disappearing from his home on Monday. On Tuesday, Germany’s Deutsche Bank received a visit from law enforcement officials over its role in the scandal.
ABN Amro is under investigation for failing to report suspicious transactions and not conducting sufficient checks on its clients, the Dutch prosecutor’s office said on Thursday. The bank said separately that it faces an investigation under the Dutch anti-money laundering and terrorist-financing law, without providing further detail.
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2/20 Martin Shkreli and Turing Pharmaceuticals
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5/20 Rogue trader
A French court cut the damages owed by rogue trader Jerome Kerviel from €4.9bn (£4.2bn) to just €1m (£860,000).
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AP
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7/20 UK to crack down on bank money laundering after reports of £65bn Russian scam, City minister says – March 2017
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Reuters
8/20 Former HBOS bankers convicted of bribery and fraud over £245m loan scam – February 2017
Two former HBOS bankers were among six people found guilty of bribery and fraud that cost customers and shareholders hundreds of millions of pounds, the BBC reports.
Lynden Scourfield, 54, a manager at HBOS, forced struggling clients to use the services of his friends David Mills, 60, and Michael Bancroft, 73. In return, the two businessmen arranged sex parties, cash and lavish gifts.
On Monday, the three were convicted at Southwark Crown Court on accounts including bribery, fraud and money laundering. Mark Dobson, another manager at HBOS, Alison Mills, and John Cartwright were also convicted.
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9/20 Lloyds chief apologises for damage caused by affair allegations – August 2016
Antonio Horta-Osorio, the chief executive of Lloyds Bank, has broken his silence over allegations about his private life admitting he regrets any “damage done to the group’s reputation”.
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10/20 Christine Lagarde faces court over £340m Bernard Tapie payment – July 2016
The head of the International Monetary Fund (IMF), Christine Lagarde, must stand trial in France over a payment of €403 million (now £340m, then £290m) to tycoon Bernard Tapie, a France’s highest appeals court has ruled.
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Ms Lagarde could risk a maximum penalty of one year in prison and a fine of €15,000 euros if convicted.
Reuters
11/20 HSBC senior manager arrested in FX rigging investigation at JFK airport in New York – July 2016
A senior executive at HSBC has been arrested at New York’s JFK airport for his alleged involvement in a conspiracy to rig currency benchmarks, according to reports.
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12/20 Former PwC employees found guilty in ‘Luxleaks’ tax scandal – June 2016
Two ex- PricewaterhouseCoopers staffers were found guilty in Luxembourg of stealing confidential tax files that helped unleash a global scandal over generous fiscal deals for hundreds of international companies.
Antoine Deltour and Raphael Halet face suspended sentences of 12 months and 9 months and were ordered to pay fines of €1,500 (£1,230) and €1,000 (£822) for their role in the so-called LuxLeaks scandal. Despite the minimal sentences, the ruling was described by Deltour’s lawyer as “shocking” and “a terrible anomaly.”
The ruling “puts on guard future whistle-blowers,” Deltour told reporters.The LuxLeaks revelations sped beyond Luxembourg, causing European Union regulators to expand a tax-subsidy probe and propose new laws to fight corporate tax dodging, while EU lawmakers created a special committee to probe fiscal deals across the 28-nation bloc.
Reuters
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Reuters
14/20 Former boss of BHS said his life was threatened – June 2016
Darren Topp, the former boss of BHS, has said former owner Dominic Chappell threatened to kill him when he challenged him over a £1.5 million transfer out of the business.
MPs on the Business, Innovation and Skills Committee asked Mr Topp about a £1.5 million transfer Mr Chappell made from BHS to a company called BHS Sweden.
Getty
15/20 Sports Direct founder Mike Ashley admits paying workers below the minimum wage – June 2016
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Reuters
16/20 Mitsubishi admits ‘improper’ fuel tests – April 2016
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17/20 Quindell, the scandal-ridden insurance firm
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Getty
18/20 Toshiba Accounting Scandal
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19/20 FIFA Corruption Scandal
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Getty
20/20 Libor fraudster
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Getty
1/20 Volkswagen emissions scandal
VW admitted to rigging its US emission tests so that diesel-powered cars would looks like they were emitting less nitrous oxide, which can damage the ozone layer and contribute to respiratory diseases. Around 11 million cars worldwide were affected.
Getty
2/20 Martin Shkreli and Turing Pharmaceuticals
Martin Shkreli became known as the “most hated man in the world” after his drug company, Turing, increased the price of a 62-year-old drug that treated HIV patients by 5,000% to $750 a pill. He was charged with illegally taking stock from Retrophin, a biotechnology firm he started in 2011, and using it pay off debts from unrelated business dealings. Shkreli, who maintains he is innocent, and says there is little evidence of fraud because his investors didn’t lose money.
3/20 Panama Papers: Millions of leaked documents expose how world’s rich and powerful hid money – April 2016
Millions of confidential documents have been leaked from one of the world’s most secretive law firms, exposing how the rich and powerful have hidden their money. Dictators and other heads of state have been accused of laundering money, avoiding sanctions and evading tax, according to the unprecedented cache of papers that show the inner workings of the law firm Mossack Fonseca, which is based in Panama.
Getty
4/20 Google’s tax avoidance
Google reached a deal with the HM Revenue and Customs to pay back £130 million in so-called “back-taxes” that have been due since 2005. George Osborne championed the deal as a “major success”. But European MEPs have since called for the Chancellor to appear in front of the committee on tax rulings to explain the tax deal.
Getty
5/20 Rogue trader
A French court cut the damages owed by rogue trader Jerome Kerviel from €4.9bn (£4.2bn) to just €1m (£860,000).
The court ruled on that Kerviel was “partly responsible” for massive losses suffered in 2008 by his former employer Societe Generale through his reckless trades.
Kerviel has consistently maintained that bosses at the French bank knew what he was doing all along.
AP
6/20 Barclays CEO under investigation for trying to identify whistleblower – Monday Paril 10
Authorities have launched an investigation into Barclays chief executive officer Jes Staley for trying to identify a whistleblower, the bank said on Monday.
The Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) are both investigating Mr Staley after the bank notified them that Mr Staley had tried to identify the author of two anonymous letters, which were sent to the board and a senior executive in June 2016.
Getty
7/20 UK to crack down on bank money laundering after reports of £65bn Russian scam, City minister says – March 2017
The Economic Secretary to the Treasury has vowed that the Government will crack down on money laundering practices, after several of the UK’s biggest banks were accused of processing money from a Russian scam, believed to involve up to $80bn (£65bn).
Reuters
8/20 Former HBOS bankers convicted of bribery and fraud over £245m loan scam – February 2017
Two former HBOS bankers were among six people found guilty of bribery and fraud that cost customers and shareholders hundreds of millions of pounds, the BBC reports.
Lynden Scourfield, 54, a manager at HBOS, forced struggling clients to use the services of his friends David Mills, 60, and Michael Bancroft, 73. In return, the two businessmen arranged sex parties, cash and lavish gifts.
On Monday, the three were convicted at Southwark Crown Court on accounts including bribery, fraud and money laundering. Mark Dobson, another manager at HBOS, Alison Mills, and John Cartwright were also convicted.
Getty
9/20 Lloyds chief apologises for damage caused by affair allegations – August 2016
Antonio Horta-Osorio, the chief executive of Lloyds Bank, has broken his silence over allegations about his private life admitting he regrets any “damage done to the group’s reputation”.
In a message sent to the bank’s 75,000 employees, the banker said that anyone can make mistakes while insisting that staff had to maintain the highest professional standards.
Getty
10/20 Christine Lagarde faces court over £340m Bernard Tapie payment – July 2016
The head of the International Monetary Fund (IMF), Christine Lagarde, must stand trial in France over a payment of €403 million (now £340m, then £290m) to tycoon Bernard Tapie, a France’s highest appeals court has ruled.
The court rejected Ms Lagarde’s appeal against a judge’s order in December for her to stand trial over allegations of negligence in her handling of the affair.
Ms Lagarde could risk a maximum penalty of one year in prison and a fine of €15,000 euros if convicted.
Reuters
11/20 HSBC senior manager arrested in FX rigging investigation at JFK airport in New York – July 2016
A senior executive at HSBC has been arrested at New York’s JFK airport for his alleged involvement in a conspiracy to rig currency benchmarks, according to reports.
Mark Johnson, global head of foreign exchange cash trading in London, was reportedly arrested on Tuesday.
He will appear before a federal court in Brooklyn on Wednesday charged with conspiracy to commit wire fraud, Bloomberg said.
Getty
12/20 Former PwC employees found guilty in ‘Luxleaks’ tax scandal – June 2016
Two ex- PricewaterhouseCoopers staffers were found guilty in Luxembourg of stealing confidential tax files that helped unleash a global scandal over generous fiscal deals for hundreds of international companies.
Antoine Deltour and Raphael Halet face suspended sentences of 12 months and 9 months and were ordered to pay fines of €1,500 (£1,230) and €1,000 (£822) for their role in the so-called LuxLeaks scandal. Despite the minimal sentences, the ruling was described by Deltour’s lawyer as “shocking” and “a terrible anomaly.”
The ruling “puts on guard future whistle-blowers,” Deltour told reporters.The LuxLeaks revelations sped beyond Luxembourg, causing European Union regulators to expand a tax-subsidy probe and propose new laws to fight corporate tax dodging, while EU lawmakers created a special committee to probe fiscal deals across the 28-nation bloc.
Reuters
13/20 Goldman Sachs dealmakers lavished Libyan officials with prostitutes to win contract – June 2016
A former Goldman Sachs dealmaker trying to persuade Gadaffi-era Libya to invest $1 billion with the investment bank procured prostitutes and invited Libyan officials to lavish parties in the hope of winning the business, the High Court heard on Monday June 13.The Libyan Investment Authority sovereign wealth fund is suing Goldman Sachs for inappropriately coercing its naïve staff into giving its sovereign wealth fund cash to the bank to invest in products they did not understand. The products were designed to generate big profits for Goldman, the LIA claims.Goldman denies wrongdoing and says the LIA was treated as an arms-length customer
Reuters
14/20 Former boss of BHS said his life was threatened – June 2016
Darren Topp, the former boss of BHS, has said former owner Dominic Chappell threatened to kill him when he challenged him over a £1.5 million transfer out of the business.
MPs on the Business, Innovation and Skills Committee asked Mr Topp about a £1.5 million transfer Mr Chappell made from BHS to a company called BHS Sweden.
Getty
15/20 Sports Direct founder Mike Ashley admits paying workers below the minimum wage – June 2016
Mike Ashley admitted paying Sports Direct employees below the minimum wage at a hearing in front of MPs. The company founder said that workers were paid less than the statutory minimum because of bottlenecks at security in an admission that could result in sanctions from HMRC.
Reuters
16/20 Mitsubishi admits ‘improper’ fuel tests – April 2016
Mitsubishi has admitted to using false fuel methods dating back to 1991. The scale of the scandal is only just coming to light after it was revealed in April that data was falsified in the testing of four types of cars, including two Nissan cars.
AP
17/20 Quindell, the scandal-ridden insurance firm
Quindell was once a darling of AIM but its share price fell in April 2014 when its accounting practices were attacked in a stinging research note by US short seller Gotham City. In August the group was forced to disclose that the £107 million pre-tax profit it had reported for 2013 was incorrect, and it had in fact suffered a £64million loss.
Getty
18/20 Toshiba Accounting Scandal
The boss of Toshiba, the Japanese technology giant, resigned in disgrace in the wake of one of the country’s biggest ever accounting scandals. His exit came two months after the company revealed that it was investigating accounting irregularities. An independent investigatory panel said that Toshiba’s management had inflated its reported profits by up to 152 billion yen (£780m) between 2008 and 2014.
19/20 FIFA Corruption Scandal
Fifa, football’s world governing body, has been engulfed by claims of widespread corruption since the summer of 2015, when the US Department of Justice indicted several top executives. It has now claimed the careers of two of the most powerful men in football, Fifa President Sepp Blatter and Uefa President Michel Platini, after they were banned for eight years from all football-related activities by Fifa’s ethics committee. A Swiss criminal investigation into the pair is ongoing.
Getty
20/20 Libor fraudster
City trader Tom Hayes, 35, has become the first person to be convicted of rigging Libor rates following a trial at London’s Southwark Crown Court. Hayes worked as a trader in yen derivatives at UBS before joining the American bank Citigroup in Tokyo. He was fired from Citigroup following an investigation into his trading methods. He returned to the UK in December 2012 and was arrested following a two-and-a-half year criminal investigation by the SFO.
Getty
ABN Amro dropped as much as 10.3 per cent in Amsterdam trading, the most since June 2016. The Dutch bank’s Additional Tier 1 bonds fell the most in six months following news of the probe.
“There’s so much uncertainty for the shareholders now,” said KBW analyst Jean-Pierre Lambert by phone. “The big question is whether there’s actual money laundering involved in this case. That’s what the prosecutor’s investigation probably is trying to find out.”
The Dutch bank said in July said that it needs to review all of its 5 million retail clients after receiving a warning from the Dutch central bank. ABN Amro took a €114m provision for the checks in the second quarter, after already setting aside 85 million euros at the end of last year for stepping up financial crime prevention in commercial banking and the credit card business.
“It’s impossible to estimate the extent of any wrong-doing at this stage,” said Philip Richards, a Bloomberg Intelligence banking analyst. The lender took a €114m provision in [the second quarter], after the Dutch central bank required it to review all domestic retail clients under customer due diligence requirements, so it has already begun addressing the issue.
The bank said at the time that sanctions may be imposed by the authorities but said it hasn’t made a provision for a possible fine as the “amount cannot be estimated at this time”.
The investigation and the resulting share price drop may make it harder for the Dutch government – which still owns 56 per cent after a bailout in 2009 – to sell off the rest of its stake as it pledged to do during the bank’s IPO in 2015. Meanwhile, the bank is still looking for a new chief executive officer after Kees van Dijkhuizen announced in June that he will leave when his term ends in April.
Following the ING fine and the central bank’s criticism, the largest Dutch banks have been stepping up compliance spending, including adding more staff to its crime prevention teams. Earlier this month, five of the country’s largest lenders said they are exploring a system to jointly monitor transactions in the fight against money laundering after the government pledged to clear legal hurdles that might prevent them from doing so.
Bloomberg
