Standard Chartered faces new £1.5bn fine threat over Iran sanctions
BRITISH banking giant Standard Chartered could face a new £1.5 billion fine for breaking US sanctions against Iran after a civil case was filed by whistleblowers, The Mail on Sunday can reveal.
The revelation comes just weeks after the FTSE 100 bank agreed to a $1.1 billion fine for the breaches. Standard Chartered agreed to the settlement earlier this month after a US criminal investigation found it had been conducting business with people linked to Iran and other nations, including Sudan and Cuba, which had been outlawed.
In a statement, chief executive Bill Winters claimed to have ‘put these historical issues behind us’.
It has since been reported the bank could be priming a $1 billion share buyback – a way of boosting its share price to appease disgruntled investors and a signal it wants to draw a line under the debacle.
But now two whistleblowers who claim to have prompted the criminal investigation have launched a civil case against Standard Chartered in the US. They could win millions of dollars in payouts.
According to files seen by The Mail on Sunday, a judge has agreed to make available papers detailing the civil case. These are expected to be online within days.
Under US law, Standard Chartered could be fined three times the damages awarded to the US Government, which received $639 million of the $1.1 billion fines. The bank could also be fined for each transaction that broke US sanctions against Iran – adding $100 million to the costs, say the whistleblowers. That means if Standard Chartered opts to fight the civil action and loses, it faces a potential penalty of up to $2 billion.
One of the whistleblowers is a Briton who was a senior executive at Standard Chartered. He says he flagged up concerns about the bank’s Iranian clients and its client monitoring systems in 2011, shortly before he left the bank.
In 2012, he went to the US authorities with an American whistleblower and handed over details.
Then the pair filed an application under the US False Claims Act, which allows whistleblowers to receive a share of the damages awarded against a company.
After an investigation, Standard Chartered in 2012 agreed to pay £415 million in penalties to the US over allegations it had broken sanctions on Iran and left the US financial system ‘vulnerable to terrorists ... and corrupt regimes’ through its ‘flagrantly deceptive actions’. However, in 2013 a criminal investigation was launched on the back of fresh evidence the bank had continued to trade with Iranian firms.
That case was settled two weeks ago with the $1.1billion fine. The whistleblowers have not received any money. The civil case offers them a chance of getting up to 25 per cent of any new damages Standard Chartered is ordered to pay.
The whistleblowers had filed their case against Standard Chartered previously, but withdrew it voluntarily in 2017. Emails seen by The Mail on Sunday show they have chosen to revive the action.
A spokesman for Standard Chartered said: ‘ We have not been served with any lawsuit similar to what you’ve described. However, we are aware of a previously dismissed lawsuit that made apparently similar allegations.
‘That complaint, which was filed by a private company, was without merit and the plaintiff dismissed it voluntarily. The federal authorities declined to join that suit.’