Tom Burroughes
Group Editor
15 August 2012
Daily News Analysis
Standard Chartered has agreed with authorities in New York to pay a civil penalty of $340 million to settle charges over transactions linked to Iran, providing another example of banks that have fallen afoul of regulators in recent months.
"The New York State Department of Financial Services 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 $250 billion,” according to a statement issued by Benjamin Lawsky, New York Superintendent of Financial Services.
Under the terms of the agreement, Standard Chartered will pay $340 million to the New York State Department of Financial Services.
Standard Chartered had been due to appear at a hearing at which it had been called to demonstrate why its license to do business in New York should not be revoked. In the past week or so, the bank, and accountancy firm Deloitte, have issued a flurry of statements defending their actions and criticizing the language used by Lawsky.
On August 6, Lawsky branded Standard Chartered a "rogue institution" that had broken US sanctions on Iran, saying it hid Iran-linked transactions with a total value of $250 billion from regulators. The bank’s chief executive, Peter Sands, denied the allegations.
Monitor
Among other details of the agreement, the UK-listed bank will set up a monitor for a term of at least two years who will report directly to DFS and evaluate the money-laundering risk controls in the New York branch and implementation of any appropriate corrective measures. In addition, DFS examiners shall be placed on site at Standard Chartered, the statement said.
Standard Chartered has also agreed to permanently install people in its New York branch to oversee and audit any offshore money-laundering due diligence and monitoring undertaken by the firm.
The settlement means Standard Chartered, a firm earning the bulk of its revenues outside the UK, where it is listed, joins a growing number of financial institutions that have been punished by regulators, or agreed settlements to head off regulatory punishments, in recent months. To view a summary of such actions, click here.
