Standard fights over admission of guilt

EMBATTLED British bank Standard Chartered is desperately negotiating to avoid admitting significant guilt in its final settlement with New York regulators over alleged sanctions-busting with Iran.

The bank, which was dramatically labelled a ‘rogue institution’ this month by the New York Department of Financial Services, has agreed to pay £220million to settle the watchdog’s claim that it had illegally hidden Iranian payments made through its New York branch. But the final terms of the agreement are still being thrashed out by teams of lawyers on both sides.

Standard Chartered has admitted to small breaches of the rules, but is determined that the final terms should not involve admission of guilt on the scale alleged by the New York regulator, Ben Lawsky.

The final settlement, which insiders said could take days or weeks to agree, will be pored over by other potential litigants and any substantial admission of guilt could be used against Standard Chartered in separate legal cases. ‘The exact wording will be key,’ said a source close to the bank.

Last week’s statement from Lawsky said: ‘The parties have agreed that the conduct at issue involved transactions of at least $250billion [£159billion].’

Those words were carefully formulated to avoid stating whether all those transactions were illegal, as claimed by Lawsky, or whether the vast majority were in fact within the rules as argued by Standard Chartered.

Lawsky’s office did not return calls from Financial Mail late last week. Standard Chartered refused to comment on the talks with the regulator or on a legal claim filed against it in New York last week by relatives of US marines killed in a terrorist attack in Lebanon in 1983.

Their families were awarded compensation by an American court against Iran in 2007, but the government in Tehran has not paid up.

The families claim that Standard Chartered was liable because it helped the Iranian regime launder money through its New York branch as alleged by Lawsky.