Bank Settles Iran Money Case
Standard Chartered to Pay New York Regulator $340 Million; Other Probes Loom
Standard Chartered PLC agreed to pay $340 million to a New York regulator to settle allegations that the bank broke U.S. money-laundering laws in handling transactions for Iranian customers, after a weeklong, trans-Atlantic regulatory drama.
The sum is the largest fine ever collected by a single U.S. regulator in a money-laundering case. The agreement came just eight days after the regulator, Superintendent Benjamin M. Lawsky of the state Department of Financial Services, stunned the banking world, and fellow U.S. regulators, by accusing the fifth-biggest U.K. bank by assets of illegally scheming over a decade to hide more than 60,000 financial transactions totaling $250 billion for Iranian clients. The allegations and the settlement, which were first reported by The Wall Street Journal, sparked criticism of Mr. Lawsky from senior U.K. officials, including central banker Mervyn King.
The settlement led the New York regulator to call off a hearing scheduled for Wednesday morning at its offices in Lower Manhattan. The bank’s chief executive, Peter A. Sands, had flown to New York this weekend to oversee settlement talks, according to people familiar with the bank.
Rest from the WSJ here…
Copy of Lawsky’s statement below…
STATEMENT FROM BENJAMIN M. LAWSKY, SUPERINTENDENT OF FINANCIAL SERVICES, REGARDING STANDARD CHARTERED BANK
Benjamin M. Lawsky, New York Superintendent of Financial Services, issued the following statement today.
“The New York State Department of Financial Services (“DFS”) and Standard Chartered Bank (“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.
“The settlement also includes the following terms:
· The Bank shall pay a civil penalty of $340 million to the New York State Department of Financial Services.
· The Bank shall install a monitor for a term of at least two years who will report directly to DFS and who will evaluate the money-laundering risk controls in the New York branch and implementation of appropriate corrective measures. In addition, DFS examiners shall be placed on site at the Bank.
· The Bank shall permanently install personnel within its New York branch to oversee and audit any offshore money-laundering due diligence and monitoring undertaken by the Bank.
“The hearing scheduled for August 15, 2012 is adjourned.
“We will continue to work with our federal and state partners on this matter.”