Several of Wall Street’s largest banks, including Citigroup, BNP Paribas, and Natixis, found themselves entangled in the collapse of London-based firm Stenn, once heralded as a $1 billion trade-finance Fintech.
The implosion, which unfolded rapidly, exposed critical oversights in due diligence and raised questions about the reliability of fintech partnerships in financial deals.
As reported by Bloomberg, many of Stenn’s purported corporate partners claimed they had no relationship with the company, leaving investors reeling and the industry grappling with the fallout.
Stenn had positioned itself as a key player in the trade-finance sector, offering solutions to streamline global supply chain transactions.
The company entered a deal that grew to nearly $1 billion, drawing in investors like HSBC, Barclays, M&G, and Goldman Sachs’ asset-management arm, alongside Citigroup and other firms.
According to documents and sources familiar with the matter, Stenn provided detailed reports and data to reassure its backers, projecting an image of robust operations and credible partnerships with large corporations like Lululemon, Repsol, and Zalando.
These reports, circulated regularly, seemingly helped sustain investor confidence, with Stenn reportedly returning $93 million to investors before its collapse.
But cracks in Stenn’s façade so-called business when HSBC, holding approximately $200 million of the firm’s debt, raised concerns.
Investigations revealed that many of the invoices central to Stenn’s trade-finance deals were fictitious, and numerous listed suppliers either didn’t exist or had no connection to the company.
One supplier was reportedly linked to a derelict building with boarded-up windows, underscoring the extent of the deception.
When nearly 50 of Stenn’s alleged corporate partners were contacted, most denied any involvement, exposing a web of fabricated relationships that had gone unnoticed by some of the world’s biggest financial institutions.
The collapse, which erased nearly $1 billion in value in a matter of days, highlighted a critical failure in oversight.
Industry observers noted that the banks’ trust in one another’s due diligence created a dangerous blind spot.
Instead of independently verifying Stenn’s claims, investors relied on the assumption that others had vetted the firm thoroughly.
This collective lapse allowed Stenn to operate unchecked, with no one asking the fundamental question: “Where is the money actually going?”
The Stenn collapse has sparked concerns about the fintech industry, where growth and innovation often outpace regulatory and operational scrutiny.
For banks, this serves as a cautionary example about the risks of chasing high returns without rigorous vetting.
As one analyst remarked:
“This wasn’t a Ponzi scheme run by amateurs—it was a sophisticated operation that exploited systemic gaps in oversight.”
In the aftermath, the affected banks are facing scrutiny from regulators and investors alike, with calls for stricter due diligence protocols in fintech partnerships.