Loopholes in the regulation of trust accounts by US law firms allegedly allowed them to be abused for money-laundering purposes, reports The Wall Street Journal.

Citing 1MDB and other examples, the report said these loopholes were used by masterminds behind the international money-laundering scandals.

Unlike normal accounts, which require clients to declare the purpose to the financial institution when transferring large amounts of money, the same standards do not apply to trust accounts of law firms, it said.