Standard agrees £217m settlement
British banking giant Standard Chartered has agreed a 340 million US dollar (£217 million) settlement with New York regulators over allegations that it hid 250 billion dollars (£160 billion) of transactions with the Iranian government.
The 160-year-old bank saw £6 billion wiped from its value amid claims that it exposed the US to terrorists, drug kingpins and weapon dealers.
The New York State Department of Financial Services (DFS) accused it of keeping around 60,000 transactions secret from US regulators over nearly 10 years. The regulator's superintendent said a monitor would be installed at the bank for at least two years to evaluate money-laundering controls at its New York branch.
Standard, which employs 2,100 staff in the UK, previously said in a statement it "strongly rejects" the portrayal by the DFS. It said the claims were inaccurate and that 99.9% of its dealings with Iran complied with regulations.
Standard, which employs nearly 90,000 people worldwide and sponsors Liverpool Football Club, was threatened with losing its licence to operate within New York state. The bank has no UK branches but has its headquarters in London, a key hub for its wholesale banking business.
In an explosive legal order, DFS superintendent Benjamin Lawsky said: "In short, SCB (Standard Chartered Bank) operated as a rogue institution."
Standard, between January 2001 and 2010, conspired with Iranian clients to route payments through New York after stripping information from wire transfer messages used to identify sanctioned countries, the regulator claimed.
The bank moved 60,000 transactions through its New York branch that were subject to US economic sanctions, and then covered up the dealings, the financial watchdog claimed. The institutions include the Central Bank of Iran as well as Bank Saderat and Bank Melli, both of which are also Iranian state-owned.
The US suspected that the Gulf state was using its banks to finance "terrorist groups" such as Hezbollah, Hamas and the Palestinian Islamic Jihad. The watchdog, which reviewed 30,000 pages of documents during the investigation, also uncovered evidence of apparently similar schemes at the bank with other US-sanctioned countries such as Libya, Burma and Sudan.
A statement released by Standard last week said: "The group does not believe the order issued by the DFS presents a full and accurate picture of the facts. Standard Chartered ceased all new business with Iranian customers in any currency over five years ago."