Dirty money
Bankrolling criminal empires
Good morning, vault keepers. This is your Stock Market Rundown for October 11th, 2024. Thanks for hanging out with me, once again. Let’s get into it:
TODAY’S TOP STORY: WASH DAY
Picture this: you’re a hardworking and successful drug dealer. Stacks of cash are piling up in your storage locker. But yacht brokers don’t take cash. So how do you get your ill-gotten gains into the official financial system?
The answer is money laundering—a shady yet time-honored activity lurking at the fringes of mainstream finance. Okay, big banks aren’t exactly rushing to serve the world’s most disreputable people. But sometimes their millions are so seductive, it just seems downright rude to ask too many questions about where those briefcases of cash came from.
Case in point: TD Bank, the 10th-largest bank in the US, just got nailed with a staggering $3 billion fine for providing a one-stop shop for criminals seeking to wash their cash. In fact, TD was hosting so many illicit profits, they should have set up a Frequent Launderer Program.
Here’s what happened: the bank’s execs, on a cost-cutting push, cheaped out on regulatory requirements to monitor transactions. As a result, all manner of dastardly criminals had a field day cleaning their dirty money using the bank’s systems.
In court documents, the US Department of Justice charged TD with “long-term, pervasive and systemic deficiencies”. Translation: their attitude toward compliance was similar to my son Jaden’s attitude towards his math homework… not a priority.
The sums involved are jaw-dropping. One enterprising money launderer finessed over $470 million of drug-dealing proceeds through the bank.
According to the feds, he dumped “piles of cash” at the teller counter on a daily basis, and bribed employees with gift cards. Is a gift card from Best Buy seriously enough to make the local bank branch manager flout compliance rules? If so, I sure hope the PS5 was worth it.
SO WHAT ELSE IS GOING ON?
The boys at Goldman Sachs are bulled up to the max. They just upped their 2024 target for the S&P 500, and said they only see a 15% chance of a recession this year. Time to blow the bonus on a new Patek.
Constellation Brands’ profits are rising faster than the bubbles in a freshly-poured pint. The maker of Corona and Modelo beat quarterly estimates as consumers chugged more light beer.
When you think of where corporations go to dodge taxes, you’re probably thinking beaches and palm trees—say, Cayman Islands, or Bermuda. But these days, you should be thinking lush green fields and leprechauns. Ireland is now one of the world’s top-ten tax havens.
Bending to pressure from animal rights activists, H&M has pledged to stop using down and feathers from ducks and geese, replacing it with recycled and synthetic substitutes. Can’t help but be suspicious that H&M execs are more worried about saving money than they are about saving waterfowl.
That’s it for the week, amigos. Have yourselves a wonderful weekend, and let’s reconvene next week for more. Yours in capitalism, The Axe
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