The financial sector was hit hard Monday following a report alleging that a number of banks, JPMorgan, HSBC, Standard Chartered Bank, Deutsche Bank and Bank of New York Mellon among them, have continued to profit from illicit dealings with disreputable people and criminal networks despite previous warnings from regulators.
According to the International Consortium of Investigative Journalists, leaked government documents show that the banks continued moving illicit funds even after being warned of potential criminal prosecutions. The documents were obtained by BuzzFeed News and shared with the ICIJ.
The report compounded a massive sell-off across global markets because of gloom and doom over COVID-19 infections and the economic damage from the pandemic.
The consortium reported that documents indicate that JPMorgan moved money for people and companies tied to the massive looting of public funds in Malaysia, Venezuela and the Ukraine. The bank also processed more than $50 million in payments over a decade for Paul Manafort, the former campaign manager for President Donald Trump, according to the documents, which are known as the FinCEN Files.
Shares of JP Morgan tumbled 4.4%.
The consortium’s investigation found the documents identify 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, and $1.3 trillion of that activity took place at Deutsche Bank. Shares of Deutsche Bank dropped 7.7%.
Deutsche Bank has been under scrutiny for years. The bank, based in Frankfurt, Germany, agreed to pay the state of New York $150 million to settle claims that it broke compliance rules in its dealings with the sex offender Jeffrey Epstein. Epstein killed himself last August in a Manhattan federal jail while awaiting trial on sex trafficking charges.
German newspaper Sueddeutsche Zeitung reported last year that Deutsche Bank gave expensive gifts to senior Chinese officials and hired family members of Chinese elite as it was trying to establish itself as a major player in China’s financial industry.
In a related action, the bank agreed last year to pay about $16 million to settle civil charges by the U.S. Securities and Exchange Commission that it violated the Foreign Corrupt Practices Act by hiring relatives of government officials in Asia and Russia in an effort to improperly influence the officials to help its investment banking business. Deutsche Bank neither admitted nor denied the allegations in the settlement.
Also in 2019, German prosecutors indicted a 48-year-old former employee of Deutsche Bank as part of a probe into a massive tax evasion scam that’s led to more than a dozen prosecutions.
In 2018, German authorities raided Deutsche Bank’s headquarters on suspicions that its employees helped clients set up offshore companies that were used to launder hundreds of millions of euros. The case was spurred by the release of the Panama Papers. A long-running money-laundering investigation of the bank is being pursued by federal prosecutors in New York.
In the wake of the Epstein scandal, Deutsche Bank said it had invested almost $1 billion to improve its training and controls and had boosted its staff overseeing the work to more than 1,500 employees “to continue enhancing our anti-financial crime capabilities.”
For years, Deutsche Bank has wrestled with regulatory penalties and fines, high costs, weak profits and a low share price. The bank went three straight years without turning an annual profit before recording positive earnings of 341 million euros for 2018.
The London Bank HSBC, Europe’s largest acknowledged in 2012 that it had laundered at least $881 million for Latin American drug cartels. However, according to the report, HSBC continued to manage money for shady clients, including suspected Russian money launderers and a Ponzi scheme under investigation in multiple countries.
Shares of HSBC, already down more than 50% this year, slumped to levels not seen in more than two decades Monday.
This story has been corrected to show that Deutsche Bank’s $16 million settlement last year was related to the Foreign Corrupt Practices Act, not a criminal money-laundering case.
The Associated Press
Protesting COVID-19 measures 'just nonsense' — Windsor-Essex's top doc – Windsor Star
Article content continued
“They think, ‘I know more than them — but I never went to any university or any school. I read something on the Facebook or I heard someone say that,’” Ahmed said. “It’s just nonsense.”
Ahmed said he is disturbed by the spread of misinformation, and lamented the “confusion and chaos” that lead to large numbers of people ignoring COVID-19 guidelines.
“Not following those measures results in what we are seeing right now in the U.S., what we are seeing right now in other areas of the country,” Ahmed said.
“I really worry about these people. They are doing a complete disservice to the entire community.”
Expressing his exasperation with anti-mask protesters, however, wasn’t Ahmed’s purpose for speaking with media on Friday.
In an update on the region’s COVID-19 situation, Ahmed noted that — in recent contrast to parts of the province like Toronto, Peel Region, and Ottawa — Windsor-Essex is doing well on most metrics.
For example, a new graph by the health unit shows that the percentage of local COVID-19 cases resulting from community transmission has not increased. Indeed, the figure dropped this month: as of Oct. 22, the proportion of new cases in Windsor-Essex that were acquired in the community is 25 per cent, going by a seven-day average.
“It’s not bad compared to some of the other regions, and what it could be,” Ahmed said.
Local hospitalizations resulting from COVID-19, going by a 14-day moving average, have remained in the single digits since the beginning of September — a trend the health unit considers “low and stable.”
Le Chateau files for CCAA protection, plans to close its doors – BayToday.ca
MONTREAL — After 60 years in operation, Le Chateau Inc. is seeking court protection from creditors to allow it to liquidate its assets and close its stores.
The Montreal-based company said Friday that it has spent much of the COVID-19 pandemic trying to refinance or sell the business to a third party that would keep it in operation, but was unsuccessful.
There is presently a Le Chateau store in North Bay at Northgate Shopping Centre.
“Its already evident impact on consumer demand for Le Chateau’s holiday party and occasion wear, which represents the core of our offering, has diminished Le Chateau’s ability to pursue its activities,” the company said.
“Regrettably, these circumstances leave the company with no option other than to commence the liquidation process.”
The company’s application for protection from creditors under the Companies’ Creditors Arrangement Act (CCAA) will be heard by a Quebec court on Friday.
Le Chateau said it intends to remain fully operational as it liquidates its 123 stores, but the eventual closures will mean the end of about 1,400 jobs — 500 at its head office and 900 at stores.
“We regret the impact this will have on our people and can assure you that we explored all options available to us prior to taking this difficult decision,” the company said.
Le Chateau expects Gordon Brothers Canada ULC and Merchant Retail Solutions ULC to be appointed as consultants to implement the liquidation and PricewaterhouseCooper Inc. to become its monitor in CCAA proceedings.
If Le Chateau’s CCAA application is granted, the company will obtain interim financing from Wells Fargo Capital Finance Corp. Canada to help it fund post-filing working capital requirements.
The company’s application comes after several other Canadian retailers have shuttered or downsized operations in the wake of the pandemic.
Reitmans Canada Ltd., Aldo Group Inc., DavidsTea Inc., Mountain Equipment Co-operative, Moores the Suit People Corp., and Laura’s Shoppe Inc. are among the dozens of retailers that have all filed for CCAA.
This report by The Canadian Press was first published Oct. 23, 2020.
Companies in this story: (TSXV:CTU)
The Canadian Press
Hospitality workers urge Ottawa to put employees first in any COVID-19 related bailout – CBC.ca
Canada’s hard-hit hospitality industry is asking for more help from government to survive the economic impact of COVID-19. But even as hotel owners are seeking more aid from Ottawa, some workers say they’re not making good use of relief programs already out there.
Hotel workers staged demonstrations in Toronto, Ottawa and Vancouver this week, to draw attention to the plight of an industry that has been hard-hit by the ongoing pandemic.
Hotel bookings are down by 90 per cent in some cases, which has created a drastic drop in demand for workers.
The industry was effectively shut down just as many others were in the early days of the pandemic. The Hotel Association of Canada says most hotels did their best to maintain staffing levels, hoping for a return of paying customers.
Some took advantage of an emergency government program known as the Canada emergency wage susidy, or CEWS, which paid up to 75 per cent of an employee’s salary, as long as they remained on the payroll.
Room attendant Leonora Mulholland lost her job at a downtown Toronto hotel in March when the pandemic struck, but she says her employer eventually brought her back on once CEWS began.
But it didn’t last long. She was laid off again in August.
After 21 years working for the same hotel, she questions why her loyalty wasn’t reciprocated by her employer.
WATCH | Hotel worker Leonora Mulholland explains what workers want:
Mulholland was one of about two dozen hospitality workers at a physically distanced demonstration in Toronto this week asking the government to step in and force hotels to use the wage subsidy to hire back like her back.
“I feel insecure,” she said. “Who knows what’s going to happen? How long this pandemic is going to be? We don’t know.”
Susie Grynol, president and CEO of the Hotel Association of Canada, says the industry is sympathetic to the plight of workers, but the industry shut itself down in the interest of public health, which is why the sector needs the government to step up with more support so that hotels can survive long enough to keep employing their workers long term.
“It’s put our industry on life support,” she said in an interview. “We missed the summer season. We’re heading into the off season and we’re not projected to recover until next summer, which means we’re not even halfway through this.”
Many hotels took advantage of CEWS, but recent changes mean the government now pays only about two thirds of the payroll costs, leaving hotels with next to no revenue on the hook for paying one third of the salaries for workers they don’t need.
“The changes to the wage subsidy program has meant that we can’t keep on every employee that we had previously,” Grynol said. “That means that some of our inactive workers are now going to be laid off permanently.”
In the recent throne speech, the government gave a vague promise of more help coming for the industry, but was short on details.
Grynol says the industry is asking Ottawa to roll back CEWS to its original terms and help the industry secure access to credit because loans from banks are drying up. And, if possible, they would love some help on fixed cost items such as property taxes.
“We’re hoping that we are going to see some support from government so that we can stabilize and ultimately bring back all of our employees,” she said.
The organizers of this week’s demonstrations say they agree that the industry needs more targeted help, but they’re wary of that help coming as a bailout for hotel operators that may do little to help the rank and file.
“Our concern is that any sector relief that’s provided to the industry would go straight to the pockets of the multimillion dollar corporations or the owners of the hotels,” said Shelli Sareen, secretary treasurer of Unite Here, a labour union representing 300,000 workers across the U.S. and Canada.
A blank cheque without accountability, “won’t benefit our members or the hospitality workers [and] frontline workers that have been most heavily impacted by the pandemic,” Sareen said.
Mulholland knows that the hotels themselves must be feeling the pain as well. But whatever the plan to help the industry is, she hopes the workers on the bottom like her get remembered along with the owners at the top.
“When they apply, the employers should put the workers first,” she said. “Not just apply, get the money, and keep it to themselves.”
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