WASHINGTON Nov 1 Standard Chartered is close to
wrapping up discussions to resolve U.S. investigations into its
Iran-linked transactions and nearing agreement on a fine in the
$300-million range, mirroring a much-publicized state settlement
over similar allegations, according to four people familiar with
The London-based bank agreed in August to pay New York's
banking regulator $340 million after that authority filed a
surprise order accusing the bank of hiding some $250 billion
worth of transactions with Iran.
In bringing its case in August, the New York Department of
Financial Services broke away from other authorities also
investigating the transfers, including the Manhattan District
Attorney, the U.S. Treasury Department, the New York Federal
Reserve and the Justice Department.
Standard Chartered has been in talks recently to resolve the
remaining probes through a joint settlement, the sources said.
Authorities have discussed additional fines similar to the
previous settlement, but have not yet agreed on a specific
number with the bank, these people said.
The bank's finance director said earlier this week it was
aiming for a final settlement by the end of the year.
Negotiators are hammering out the final language
of that settlement, the sources said.
Some sticking points remain, including whether the bank will
be subject to separate monitoring requirements from the New York
Federal Reserve in addition to those it already agreed to with
the state banking regulator and what the exact terms of any such
review would be, one person said.
Representatives of the bank and the U.S. authorities
concerned either declined to comment or did not immediately
respond to a request for comment.
In reaching the earlier settlement, New York banking
superintendent Benjamin Lawsky based his case on accusations
the bank systematically stripped information from $250 billion
worth of wire transfers linked to Iran.
The stripping helped disguise the identity of the parties.
Traditionally, federal authorities have only based their
settlements on the amount of transfers that directly breached
sanctions, not necessarily on transfers that just involved the
doctoring of information to disguise the parties.
The size of the penalty under discussion is surprising to
some because the other agencies appeared to initially be looking
at a smaller dollar amount. Federal officials said in the past
the actual sanctions-busting transactions in the Standard
Chartered case were closer to $20 million, which potentially
signaled a much smaller case.
It is unclear which charges the authorities might be using
to arrive at a larger figure, but state prosecutors at the New
York District Attorney's office may have more leeway than the
Department of Justice and the Treasury Department to levy
tougher penalties, two people familiar with the matter said.
Lawsky's order also hinted at potential issues involving
sanctioned countries other than Iran, including Libya, Myanmar
and Sudan. Such additional misconduct could be part of a larger
The offices of several key negotiators, including the
Manhattan District Attorney and the New York Fed, have been
plagued with power and other issues in the aftermath of
Hurricane Sandy, which could delay any final resolution by a few
In arriving at his settlement, Lawsky ignored the entreaties
of federal regulators to drop his own action in favor of a
single, global settlement.
Tensions between regulators appear to be continuing,
including disagreements over whether to coordinate monitoring
requirements by the New York Fed and the New York Department of
Financial Services, the sources added.