A recent investigation by the Wall Street Journal uncovered the wealth management branch of investment bank Morgan Stanley’s alleged failure to properly vet its rich clients’ assets. Interviews with employees and internal messages paint a picture of dubious business ventures under the bank’s management. 

A whopping 24% of Morgan Stanley international wealth-management accounts were labeled by the company as being high risk for money laundering, according to a 2023 document summarizing more than 46,500 clients viewed by the Journal. The bank apparently added in said report that its anti-money-laundering controls are “weak” because of “longstanding issues globally” with the enhanced due diligence process. 

While this might just be a story of an investment bank’s alleged negligence in curbing the wealthy, the large volume of accounts raises the question of whether there’s a larger problem of the ultrarich finding loopholes. Morgan Stanley did not immediately respond to Fortune’s request for comment. 

The mystery of money laundering 

Money laundering, an umbrella term for clandestinely making a profit from engaging in illegal activities, is a rampant problem in the global economy. The United Nations approximates that up to $2 trillion is money laundered annually, representing 2% to 5% of the global GDP.

Knowing the true depths of illicit financial activity proves tricky, but recently there’s been a slight lifting of the veil. For instance, a bipartisan report from the Senate in 2020 revealed that Russian oligarchs evaded sanctions on the country by funneling $18 million into high-value art. Crypto is shaping up to be another venture for the wealthy to fudge the numbers, as a report from Chainalysis notes.

Such suspicious activity appears to have taken off, especially in Europe. Money-laundering activities spiked by 25% between 2018 and 2023, according to data from financial service company Moody’s. That outpaces the global increase by 8%. Money laundering seems to be most prevalent in the U.K., followed by Italy, and then Russia.

“There is a concerning link between human trafficking and the facilitation of money laundering,” said Keith Berry, a general manager at Moody’s Analytics, referring to the rise in modern slavery as well. “This is an expanding environment that is always looking for vulnerabilities in the financial system, on weekends, holidays, and every day when legitimate staff are not online to protect their organization,” he added.

TD Bank’s cautionary tale

It appears as if some institutions are unable to safeguard against these misdoings, or willing to turn a blind eye to them. Morgan Stanley isn’t the first bank to come under fire for allegedly failing to rein in the rich. 

This October, TD Bank pled guilty to charges related to money laundering. The bank was investigated by the Department of Justice for the actions of “Chinese crime groups and drug traffickers” using the lender to “launder money from U.S. fentanyl sales,” according to the Wall Street Journal. The company became the largest bank to plead guilty to money laundering and paid $3 billion in penalties.