The recent accounting and governance scandals were sufficiently numerous and serious to generate widespread concern among investors about the reliability of financial reporting in general. These scandals were a notable factor behind the U.S. stock market slide in the spring and summer of 2002, amidst the cascade of scandals culminating with WorldCom’s revelations in June that year.
Banks could be drawn into money laundering constructions engineered by criminal organisations that use complex methods to finance real estate with criminal gains. Besides “know your customer”, there are specific sanctions regulations aimed in part at preventing terrorist financing. Institutions must also take measures to prevent their misuse for financing weapons of mass destruction in countries such as Iran.