Bloomberg
Standard Chartered Faces N.Y. Suspension Over Iran Deals
By Greg Farrell and Bradley Keoun - Aug 6, 2012
<span style="font-weight: bold">Standard Chartered Plc (STAN) conducted $250 billion of transactions with Iranian banks over seven years in violation of federal money laundering laws</span>, a New York regulator said in an order warning that the firm’s U.S. unit may be suspended from doing business in the state.
Standard Chartered earned hundreds of millions of dollars in fees for handling transactions on behalf of Iranian institutions that are subject to U.S. economic sanctions, New York’s Department of Financial Services said yesterday. The London-based bank, which generates almost 90 percent of its profit and revenue in Asia, Africa and the Middle East, was ordered by the regulator to hire an independent, on-site monitor to oversee operations in the state.
<span style="text-decoration: underline"><span style="font-weight: bold">When the head of the bank’s U.S. unit warned his superiors in London in 2006 that Standard Chartered’s actions could expose it to “catastrophic reputational damage,” he received a reply referring to U.S. employees with an obscenity, according to the order.
“Who are you to tell us, the rest of the world, that we’re not going to deal with Iranians?” a bank superior in London said, according to the New York regulatory order. </span></span>...
The accusations against Standard Chartered are the latest in a series of alleged regulatory transgressions by the New York offices of British banks.
In August 2010, Barclays Plc agreed to pay $298 million to settle claims it violated trade laws by facilitating transactions involving banks from countries under U.S. sanctions including Cuba, Iran, Libya and Sudan.
In 2009, a unit of London-based Lloyds accused of allowing Iran illegal access to the U.S. financial system agreed to pay $350 million to settle an investigation by Manhattan District Attorney Robert Morgenthau.
HSBC, also based on London, last month made a $700 million provision for U.S. fines after a Senate committee found the bank gave terrorists, drug cartels and criminals access to the U.S. financial system. That sum may increase, according to Chief Executive Officer Stuart Gulliver.
Concealed Transactions
Senate investigators said HSBC concealed transactions that bypassed U.S. sanctions against Iran. ...
“It really seems as if they are perfectly prepared to flout whatever sanctions, rules and laws anybody tries to impose on them,” said Shaffer, the former New York Fed economist. “You know, we’re bigger than any one regulator.”
“This isn’t the first wake-up call that those institutions would have had,” he said. “It starts to convey a picture that London-based banks have decided that they’re not going to pay attention to U.S. sanctions with regard to their U.S. operations.” ...
Full story
http://www.bloomberg.com/news/2012-08-06/standard-chartered-may-face-suspension-in-new-york.html
Standard Chartered Faces N.Y. Suspension Over Iran Deals
By Greg Farrell and Bradley Keoun - Aug 6, 2012
<span style="font-weight: bold">Standard Chartered Plc (STAN) conducted $250 billion of transactions with Iranian banks over seven years in violation of federal money laundering laws</span>, a New York regulator said in an order warning that the firm’s U.S. unit may be suspended from doing business in the state.
Standard Chartered earned hundreds of millions of dollars in fees for handling transactions on behalf of Iranian institutions that are subject to U.S. economic sanctions, New York’s Department of Financial Services said yesterday. The London-based bank, which generates almost 90 percent of its profit and revenue in Asia, Africa and the Middle East, was ordered by the regulator to hire an independent, on-site monitor to oversee operations in the state.
<span style="text-decoration: underline"><span style="font-weight: bold">When the head of the bank’s U.S. unit warned his superiors in London in 2006 that Standard Chartered’s actions could expose it to “catastrophic reputational damage,” he received a reply referring to U.S. employees with an obscenity, according to the order.
“Who are you to tell us, the rest of the world, that we’re not going to deal with Iranians?” a bank superior in London said, according to the New York regulatory order. </span></span>...
The accusations against Standard Chartered are the latest in a series of alleged regulatory transgressions by the New York offices of British banks.
In August 2010, Barclays Plc agreed to pay $298 million to settle claims it violated trade laws by facilitating transactions involving banks from countries under U.S. sanctions including Cuba, Iran, Libya and Sudan.
In 2009, a unit of London-based Lloyds accused of allowing Iran illegal access to the U.S. financial system agreed to pay $350 million to settle an investigation by Manhattan District Attorney Robert Morgenthau.
HSBC, also based on London, last month made a $700 million provision for U.S. fines after a Senate committee found the bank gave terrorists, drug cartels and criminals access to the U.S. financial system. That sum may increase, according to Chief Executive Officer Stuart Gulliver.
Concealed Transactions
Senate investigators said HSBC concealed transactions that bypassed U.S. sanctions against Iran. ...
“It really seems as if they are perfectly prepared to flout whatever sanctions, rules and laws anybody tries to impose on them,” said Shaffer, the former New York Fed economist. “You know, we’re bigger than any one regulator.”
“This isn’t the first wake-up call that those institutions would have had,” he said. “It starts to convey a picture that London-based banks have decided that they’re not going to pay attention to U.S. sanctions with regard to their U.S. operations.” ...
Full story
http://www.bloomberg.com/news/2012-08-06/standard-chartered-may-face-suspension-in-new-york.html
