The superintendent of Department of Financial Services, Benjamin Lawsky, said Monday, that Standard Chartered PLC (LON:STAN) (LON:STAC) is found to have violated the U.S. anti-money laundering laws. The London-based bank hid transactions worth $250 billion with the Iranian entities, including Central Bank of Iran, Bank Melli, and Bank Saderat.
Standard Chartered PLC (LON:STAN) (LON:STAC) earned large fees by hiding about 60,000 transactions in the past seven years. Mr. Lawsky said that the bank was helped by its consultant, Deloitte & Touche LLP, in hiding the details from the regulators, including Federal Reserve Bank of New York.
Standard Chartered PLC (LON:STAN) (LON:STAC) has “left the U.S. 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,” said Benjamin Lawsky on Monday. The New York regulator warned that Standard Chartered may lose its license to operate in the state.
The Iranian institutions that Standard Chartered PLC (LON:STAN) (LON:STAC) dealt with are subject to economic sanctions. The regulator ordered Standard Chartered to hire an independent monitor to carry out its operations in the state.
The London-based bank earns about 90 percent of its revenues from Africa, Asia, and the Middle East. The order also mentioned that the bank’s US officials had warned the top management in London in 2006, that such actions could damage the bank’s reputation. In return, they received this statement from their superiors- “Who are you to tell us, the rest of the world, that we’re not going to deal with Iranians?”
Standard Chartered had $40.8 billion of assets in New York operations as of March this year. The regulatory board is also investigating Standard Chartered’s transactions with other countries sanctioned by the USA, such as Libya, the Sudan, and Myanmar.