Standard Chartered inks $340 million deal with NY regulator

NEW YORK Fri Sep 21, 2012 2:55pm EDT

An exterior view of the Standard Chartered headquarters is seen in London August 7, 2012. REUTERS/Olivia Harris

An exterior view of the Standard Chartered headquarters is seen in London August 7, 2012.

Credit: Reuters/Olivia Harris

NEW YORK (Reuters) - Standard Chartered Bank signed a final agreement with New York's banking regulator to pay $340 million to settle allegations that it hid transactions with Iran from regulators.

The London-based bank agreed in principle to pay the civil penalty last month after its stock dropped amid the allegations and a threat to revoke the bank's license to do business in New York.

The parties agreed the conduct at issue involved transactions of about $250 billion, Benjamin Lawsky, superintendent of the New York state Department of Financial Services, said in announcing the formal agreement.

A criminal investigation into Standard Chartered's practices is close to being completed and a joint settlement with other New York and U.S. authorities will probably be completed in the next couple of weeks, according to a person familiar with the probe.

"We are pleased to have reached a final settlement with the Department of Financial Services, and we look forward to resolving all outstanding issues with other U.S. authorities related to our past sanctions compliance," said Julie Gibson, a spokeswoman for Standard Chartered in New York.

The bank's negotiations with the Manhattan District Attorney, the U.S. Treasury Department, Justice Department and the New York Federal Reserve are "ongoing," Gibson said.

The bank could not predict when discussions with other U.S. agencies would be completed, or the outcome, and therefore "potential liabilities cannot be reasonably quantified," it added in a statement.

Lawsky's move against Standard Chartered last month angered other U.S. regulators who had spent more than two years investigating the bank. The other regulators sought a single, global settlement, according to people close to the matter.

According to the consent order signed Friday, New York's Department of Financial Services found the bank provided U.S. dollar clearing services to Iranian customers from at least 2001 through 2007.

In processing transactions, the bank stripped or left out Iranian information from U.S. dollar wire payment information, the agreement said.

The practice prevented regulators from "identifying suspicious patterns of activity" which could assist law enforcement authorities, the regulator found.

In addition to the $340 million payment, Standard Chartered agreed to install an outside monitor for two years and to hire an anti-money laundering auditor in its New York branch.

The other U.S. authorities negotiating with Standard Chartered either did not immediately respond to requests for comment or declined to comment.

(Reporting by Karen Freifeld, additional reporting by Steve Slater in London; Editing by Leslie Gevirtz and Richard Chang)

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
Comments (3)
bgreen2224 wrote:
So does this mean they can come into the fallout shelter when Iran detonates a nuke in downtown NYC? Why are these greedy criminals still allowed to be doing business in the US? Who made that decision…oh, yeah, the guy who cashed their check.

Sep 21, 2012 1:42pm EDT  --  Report as abuse
neahkahnie wrote:
$340 million for a $250 BILLION dollar transfer to Iran? That’s 14cents on $100. Not even coffee money. So if a drug dealer made $100 million in a drug deal, his “fine” or “tax” would be $140,000. I think the drug dealer would be more than happy to pay that “fine” or “tax” and keep on selling.

Sep 21, 2012 4:40pm EDT  --  Report as abuse
bocomojoe wrote:
Got loose change from the sofa in the executive lounge to pay the fine.

Sep 21, 2012 12:47am EDT  --  Report as abuse
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.