I was intrigued to see the lack of headlines about American Express this month, especially as they were fined $65 million by the US Department of Justice the other day.
I only caught the news hidden in a US notice about banking matters.
it did get a little coverage in America, it wasn’t in the main bank
headlines elsewhere. It hardly got any coverage in the Financial Times
or on the news headlines. It wasn’t reported on the BBC or other main
Maybe it didn’t matter in comparison with the bear market, hedge fund crashes, algo explosions and index drops …
… except that $65 million is an awful lot of money and looks like it will lead to AMEX selling off their private banking operations, valued at $500 million.
In fact, it was the bank that created the $65 million problem, a bit more than the $64,000 question.
What had the bank done?
Had they funded Osama Bin Laden?
Had they given Iraqi insurgents gold or, even worse, plantinum cards?
Had they organised George W Bush’s farewell party a little too early?
No, none of these.
Something far worse.
They had allowed drug cartels to use the private bank to move monies around the world.
In other words, they fell foul of the Patriot Act, the Bank Secrecy Act, FATF, KYC, AML, OFAC … you name it.
the next time you use your AMEX Card, spare a thought for the poor guys
at AMEX Private Bank who must have been so busy using their Black AMEX
Cards to cut up a line of Special K coke that they failed to notice the
supplier was using their accounts to bank the payments.