Standard Chartered strongly rejected the portrayal of its handling of Iran-related transactions by New York’s top bank regulator, which branded the British bank a “rogue institution”.
The New York State Department of Financial Services (DFS) has threatened to strip Standard Chartered of its state banking license, saying the British bank hid $250 billion in transactions tied to Iran, in violation of US law.
“The group strongly rejects the position or the portrayal of facts as set out in the order issued by the DFS,” Standard Chartered said in a statement on Tuesday, adding that it does “not believe the order issued by the DFS presents a full and accurate picture of the facts.”
A rogue Standard Chartered banking unit violated US anti-money laundering laws by scheming with Iran to hide more than $250bn of transactions, and may lose its license to operate in New York State, a state banking regulator said on Monday.
Benjamin Lawsky, superintendent of the state’s department of financial services, said Standard Chartered Bank reaped hundreds of millions of dollars of fees by scheming with Iran’s government despite US economic sanctions to hide roughly 60,000 transactions from 2001 to 2010.
Lawsky’s order quotes a senior Standard Chartered official in London who, upon being advised by a North American colleague that its Iran dealings could cause “catastrophic reputational damage,” reportedly replied:
“You f***ing Americans. Who are you to tell us, the rest of the world, that we’re not going to deal with Iranians.”
Lawsky said the unit of the London-based bank was “apparently aided” by its consultant Deloitte & Touche LLP, which hid details from regulators, and despite being under supervision by the Federal Reserve Bank of New York and other regulators for other compliance failures.
“The bank’s actions left the US financial system vulnerable to terrorists, weapons dealers, drug kingpins and corrupt regimes, and deprived law enforcement investigators of crucial information used to track all manner of criminal activity,” Lawsky said in an order made public on Monday.
“In short, Standard Chartered Bank operated as a rogue institution,” Lawsky added.
A Standard Chartered spokesman said the bank “is conducting a review of its historical US sanctions compliance and is discussing that review with US enforcement agencies and regulators. The group cannot predict when this review and these discussions will be completed or what the outcome will be.”
It was unclear whether other companies are being targeted in the probe.
The charges are the latest by US law enforcement that highlight how banks might have systematically moved US dollars through sanctioned countries despite a federal crackdown.
US Senate report revealed last month that a ’pervasively polluted’ culture at HSBC Holdings Plc allowed ‘dodgy clients’ from the world’s most dangerous and secretive corners including Iran, Mexico, the Cayman Islands, Saudi Arabia and Syria, to route shadowy funds.