SEC Might Be Next To Investigate Mossack Fonseca Leak

The American watchdog is free to look at the exposed "Panama Papers" for possible cases of corruption.

American authorities will not refrain from searching for signs of illegal financial activity using private documents exposed after a law firm was hacked. If you tried hiding your ill-gotten gains or avoid paying tax by working with Mossack Fonseca you should not expect American watchdogs to overlook it just for respecting your privacy.

The “Panama Papers” are 11.5 million confidential documents regarding more than 214,000 offshore companies. The papers exposed the workings of celebrities such as Jackie Chan and Simon Cowell as well as of politicians from Argentina, Iceland, Saudi Arabia, Ukraine, and the United Arab Emirates. Interestingly, no American individuals or companies have been exposed yet.

Asked about the subject at a conference on Wednesday, Kara Novaco Brockmeyer, head of the U.S. Securities and Exchange Commission Foreign Corrupt Practices Act (FCPA), answered: “We look at all public sources.” This likely means that they will not make a special case for this “public source” just because Mossack Fonseca claims it was hacked and the information stolen.

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Across the pond the Financial Conduct Authority (FCA), the UK’s financial regulator, has sent a letter to around twenty banks giving them until 15 April to conduct initial investigations into any ties with law firm Mossack Fonseca, or to companies formed or managed by it. Mossack Fonseca was used by many groups including HSBC, UBS, Coutts, Rothschild and Credit Suisse to set up a large number of offshore concerns for their clients over the past 40 years.

Jürgen Mossack, co-founder of Mossack Fonseca, is reported to have said that “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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