In a sensational statement released last week, the New York State Department of Financial Services accused the bank, which has its headquarters in London, of conducting transactions worth at least $250bn with Iranian banks and government organisations.
In the missive, the regulator described the bank as a “rogue organisation” with an “evident zeal to make hundreds of millions of dollars at any cost”. The statement also included a damning extract from one of 30,000 documents reviewed by the state department in which the bank’s group executive director is quoted as saying: “You f—ing Americans. Who are you to tell us, the rest of the world, that we’re not going to deal with Iranians.”
In an announcement which came out late yesterday, the state department said: “The New York State Department of Financial Services (DFS) and Standard Chartered Bank have reached an agreement to settle the matters raised in the DFS Order dated August 6, 2012. The parties have agreed that the conduct at issue involved transactions of at least $250bn.”
This statement is interesting because Standard Chartered has conceded the issue invovled transactions worth $250bn and shortly after the accusations were made the bank had insisted the total value of the transactions in question was “under £14m”.
The settlement confirmed the bank will have to pay a civil penalty of $340m (£216m) to the regulator. It also said the bank will have to install a monitor for at least two years, reporting directly to the regulator, who will evaluate the money-laundering due diligence and monitoring undertaken by the bank.
Standard Chartered’s fine is less than the record £290m penalty paid by Barclays following its Libor fixing scandal, but it could be slapped with further fines if federal and state regulators pursue redress. Meanwhile, HSBC has set aside £445m for potential fines in the US for money laundering.
The statement added that a hearing due to take place today, which was likely to have seen the state department withdraw the bank’s New York banking licence, has been adjourned.
Take a look at our analysis on the effect consecutive misdemeanours from the banks have had on the investment case for financials, and tell us what you think…
