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US Authorities Look To Use Panama Papers For Their Investigations

the panama papersThe United States’ SEC and the UK’s FCA along with financial watchdogs from across the world are expected to use information from the leaked documents of the Panamanian law firm Mossack Fonseca, popularly dubbed as the Panama Papers to cross check a number of open investigations.

Kara Novaco Brockmeyer, head of the U.S. Securities and Exchange Commission Foreign Corrupt Practices Act (FCPA) has said that regulators look at all public documents while conducting investigations, indicating that the documents are fair game despite being hacked. The Panama Papers were hacked and released into the public domain and implicated a number of world leaders, leading entrepreneurs and celebrities.

UK’s financial regulator, the Financial Conduct Authority (FCA) had earlier asked close to 20 banks to conduct an initial review of the leaked documents to identify any dealings with Mossack Fonseca or with the shell companies named in the Panama Papers and submit a report specifying all such relationships by April 15. The regulator has asked banks and other financial institutions to provide regular updates on the issue.

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Mossack Fonseca was one of the top law firms used by many well-known banking groups including UBS , HSBC, Coutts, Credit Suisse and Rothschild to create offshore shell companies for their clients.

The Panama Papers which were leaked last month contained over 11.5 million confidential documents revealing the secret financial dealings of many politicians and their extended family. The documents span a period of 40 years and relate to over 214,000 offshore companies used by the wealthy to avoid taxes and hide their enormous wealth. We also reported last week the EU were in the process of passing a bill requiring financial disclosures from multinational companies.

The interesting thing about the Panama Paper leak is that none of the documents feature any American companies or individuals. Even though no American individuals or enterprises have been named, U.S. Attorney Preet Bharara has set up a criminal investigation on issues relevant to the leaked documents.

He has written to International Consortium of Investigative Journalists (ICIJ) which carried out the investigation into the leaked documents along with other international media organizations, saying that he would like to discuss the documents released. He went on to state that he believes a criminal investigation is necessary given the magnitude of revelations.

The founders of the law firm have said that they have been unfairly targeted since their dealings are completely legal. In a statement, Jürgen Mossack, co-founder of Mossack Fonseca, said,

The firm had done nothing wrong and had become the subject of a witch hunt aimed at discrediting the legitimate industry of setting up offshore companies that are allowed to be used legally for both privacy and tax reasons.


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