Compliance

11:43 AM
Reuters
Reuters
News
Connect Directly
RSS
E-Mail
50%
50%

Standard Chartered Weighs Settling Iran Laundering Probe

British bank Standard Chartered is rushing to reach a settlement within days over charges it hid transactions tied to Iran and is set to resume talks with U.S. regulators on Monday, sources familiar with the situation said.

Standard Chartered vehemently disagrees with the agency's allegation the bank improperly processed $250 billion tied to Iran, which Lawsky cited in his order issued Aug. 6. The heart of his order, however, alleges the bank violated state laws when it concealed records of transactions from bank examiners.

The talks could still collapse, and the hearing also could be postponed to allow more time for negotiations.

The bank, meanwhile, was already cooperating in a separate probe dating to 2010 that included the U.S. Justice Department and the Manhattan district attorney. That investigation is aimed at determining whether Standard Chartered violated U.S. sanctions laws and talks on a settlement have been taking place separately from the state discussions.

A settlement with New York would end a period of turmoil for the bank and law enforcement officials and likely would result in a multimillion-dollar fine for Standard Chartered. A settlement with federal officials could also result in a multimillion-dollar fine.

Officials for the Justice and Treasury departments and the Manhattan district attorney either weren't available for comment or declined to comment.

Lawsky's order cited communications between Standard Chartered officials about the reputational and legal threats to the bank if it kept doing business with Iranian clients.

Lawsky's department and Standard Chartered declined to comment.

Faced with similar accusations, some banks prefer to settle quietly. Barclays Plc, Credit Suisse Group, Lloyds Banking Group, J.P. Morgan Chase & Co. and ING Bank NV had agreed in prior years to settlements totalling nearly $2 billion into how those banks allegedly processed money or assets tied to sanctioned countries.

Standard Chartered, by comparison, said last week that Lawsky's "interpretation" that the bank had improperly handled Iranian transactions was "incorrect as a matter of law".

Lawsky's office alleged the bank had hidden from regulators some $250 billion in improper transactions tied to Iran. The bank said that total amount that didn't adhere to U.S. sanction laws was less than $14 million.

Copyright 2012 by Reuters. All rights reserved.

Previous
2 of 2
Next
Comment  | 
Print  | 
More Insights
Register for Bank Systems & Technology Newsletters
White Papers
Current Issue
Bank Systems & Technology - August 2014
Modern core systems are emerging as the foundations of effective channel integration and customer engagement initiatives.
Slideshows
Video