Standard Chartered Faces N.Y. Suspension Over $250 Billion Illegal Iran Deals
Standard Chartered Plc (STAN) conducted $250 billion of transactions with Iranian entities over more than seven years in violation of federal money laundering laws, a New York regulator said in an order warning that its U.S. unit may be suspended from doing business in the state.
Standard Chartered earned hundreds of millions of dollars in fees for handling transactions on behalf of Iranian institutions that are subject to U.S. economic sanctions, the Department of Financial Services, run by Benjamin Lawsky, said today. The London-based bank, which generates almost 90 percent of its profit and revenue in Asia, Africa and the Middle East, was ordered by the agency to hire an independent, on-site monitor to oversee its operations in the state.
According to the order, when the head of the bank’s U.S. operations warned his superiors in London in 2006 that Standard Chartered’s actions could expose it to “catastrophic reputational damage,” he received a reply referring to the U.S. unit’s employees with an obscenity.
“Who are you to tell us, the rest of the world, that we’re not going to deal with Iranians?” a bank superior in London said, according to the New York regulator’s order.
Standard Chartered fell 6.2 percent to 1,470 pence in London trading, its biggest drop in almost 12 months. The shares had risen 11.2 percent this year before today, making it the third-best performing British bank stock after Lloyds Banking Group Plc and HSBC Holdings Plc.