A recent investigation by The Wall Street Journal revealed serious deficiencies in the operation of the asset management department of the investment bank Morgan Stanley. Based on employee interviews and internal documents
it appears that the bank did not properly verify the origin of the wealth of its wealthy clients.
According to a 2023 internal report of more than 46,500 clients, Morgan Stanley International the bank itself classified 24% of its asset management accounts as high risk from the point of view of money laundering. In the document, the financial institution admitted that its anti-money laundering control system was “weak” and that there were “long-standing problems worldwide” with enhanced due diligence procedures.
Money laundering is a global problem.
According to UN estimates, up to 2 billion dollars of illegal money can be laundered every year, which is 2-5% of the global GDP.
in Europe the situation is particularly worrying. According to Moody’s 25% increase in money laundering activities on the continent between 2018 and 2023which significantly exceeds the 8% global growth. The United Kingdom, Italy and Russia appear to be the most affected countries.
The case of Morgan Stanley is not unique in the banking sector. In October of this year, TD Bank pleaded guilty to money laundering charges. According to a Justice Department investigation, the bank allowed “Chinese criminal groups and drug traffickers” to “launder money from U.S. fentanyl sales.” TD Bank paid $3 billion in fines, and became the largest bank to plead guilty to money laundering.
The cover image is an illustration. Cover image source: Getty Images
Source: www.portfolio.hu
