FinCEN Files: Investigation into Dirty Money Transfers from Major Global Banks

At least $ 2 trillion in suspicious transactions were carried out between 2000 and 2017 by several major global banks. This is what an investigation by the International Consortium of Investigative Journalists, made up of 400 journalists from the media in 88 countries, including the investigation units of Radio France and the newspaper Le Monde, reveals.
For their investigation, ICIJ journalists were able to obtain "suspicious activity reports". These are top-secret documents that US bank internal compliance officials send to US financial intelligence agencies when they detect questionable money transfers.

According to these documents, 2,000 billion dollars in suspicious transactions may have been carried out. It is dirty money linked to drugs, corruption, organized crime and terrorism.

Large banks are singled out like JP Morgan, Deutsche Bank, Bank of New York Mellon or HSBC. They ensure, however, that they make significant efforts to combat financial crime an…

The dividend is not a lifeline | Canada

Retail investors (and even some more sophisticated institutional investors) have always been attracted to dividend yields. The higher they are, the greater the appeal. This trend has been particularly exacerbated in a world where interest rates are very low and bonds yield almost nothing. But the value of a security has always been and will always be the present value of cash flow for the life of the business, not its dividend. There are many companies that create a lot of value by keeping their profits rather than paying them in dividends. That being said, the focus on dividends is understandable, as it is a simple metric. On the other hand, to estimate the value of a company, you have to take into account many factors, such as the dynamics of the industry up to specific problems of the company.

The dividend is not a lifeline

During this difficult time we are currently experiencing, many companies have announced that dividends will be cut or stopped altogether. Investors are realizing that focusing on dividends instead of other important factors in a company may not be the best idea. Let's take a look at an industry that has seen a general decrease in dividends.

With the Western Canadian Select now around $ 10 a barrel, many Canadian oil players have had to either reduce or completely cut their dividend. Some examples such as Crescent Point Energy, Inter Pipeline Ltd, WhiteCap Resources reduced their dividends by 75%, 72% and 50% respectively. While no one could have predicted what we are going through now, it was also impossible to have a high degree of confidence in the industry's biggest variable, the price of oil. Knowing that, should the dividend yield have been a primary objective when looking to invest in the oil sector? Probably not.

The holy grail of investing in dividend securities has always been Canadian banks. The five largest banks have paid dividends for more than a century, a record they most certainly intend to keep, as the CEO of CIBC reassured investors of their dividend in a recent interview. To protect themselves, retail investors should instead focus on different metrics such as leverage, underwriting and profitability, not just the dividend.

To conclude, we encourage investors to consider dividends as one of many variables in their analysis process during this period. You might get something that might not be there when the crisis is over.