WASHINGTON 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 matter.
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 settlement.
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 weeks.
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.
(Reporting By Aruna Viswanatha in Washington and Karen Freifeld in New York; Editing by Matthew Goldstein, Jennifer Ablan and Andre Grenon)