Probe may require up to Us$700mil
NEW YORK: Standard Chartered Plc (StanChart) might be asked to pay as much as US$700mil to resolve money laundering allegations filed by New York’s banking superintendent after his department grew impatient with inaction by federal regulators, a person familiar with the case said.
Benjamin Lawsky, who heads up New York’s Department of Financial Services, tried unsuccessfully a few months ago to get US regulators to punish the London-based bank for conduct involving disguised Iranian money transfers, said the person, who asked not to be identified because the matter is confidential.
The transfers have been under investigation by federal agencies for more than two years, according to Lawsky’s Aug 6 order.
A settlement of US$700mil would match the amount that HSBC Holdings Plc set aside last month after a Senate committee found the bank gave terrorists, drug cartels and criminals access to the US financial system. A payment of that sum by HSBC would be the largest paid by any bank so far.
Other foreign banks that have resolved allegations of executing wire transfers on behalf of sanctioned nations or groups include Barclays Plc, Credit Suisse Group AG, Lloyds Banking Group Plc and ABN AMRO Group NV. In each of these cases, the settlements involved joint investigations by regulators.
Lawsky’s decision to move forward alone was unusual, said Jimmy Gurule, a former Treasury Department undersecretary for enforcement who now teaches at the University of Notre Dame in South Bend, Indiana.
StanChart would “vigorously” contest the regulator’s findings, chief executive officer Peter Sands said in a memorandum to employees obtained by Bloomberg.
“The bank remains in good shape and open for business for our customers and clients,” Sands told employees on Tuesday. — Bloomberg