Regulator: British Bank Laundered Billions for Iran Through New York
by IPT News • Aug 7, 2012 at 1:56 pm
Shares of Britain's fifth largest bank, Standard Chartered, plummeted Tuesday after New York's top banking regulator accused it of laundering $250 billion in prohibited Iranian transactions and threatened to revoke its license to operate in the state.
An order issued Monday by state Financial Services Superintendent Benjamin Lawsky accused the bank of being driven by its "evident zeal to make hundreds of millions of dollars [in fees] at almost any cost." Its "actions 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."
The order is based on a review of 30,000 pages of internal documents, including emails, spanning from 2001-2010. It found that senior SCB officials schemed to use the New York branch to hide transactions with Iran. In doing so, SCB "indisputably helped sustain a global threat to peace and stability. By definition, any banking institution that engages in such conduct is unsafe and unsound."
It called on the bank to show why its operating license shouldn't be revoked and why other operations should be allowed to continue in the interim.
The bank denied the allegations, saying it complied with regulations in nearly every case and that the state order does not provide "a full and accurate picture of the facts." But the order cites a statement by the group's executive director in London, who in 2006 allegedly expressed "SCB's obvious contempt for U.S. banking regulations" by saying "You f---ing Americans. Who are you to tell us, the rest of the world, that we're not going to deal with Iranians."
The state order follows accusations by a U.S. Senate committee last month that another British bank, HSBC, laundered money for terrorists and drug traffickers. In June, ING Bank agreed to a $619 million penalty for similar violations involving Cuban and Iranian clients.
Tuesday's stock dive decreased Standard Chartered's value by billions of dollars.
But the order isn't the bank's only problem. The FBI reportedly is investigating, too, to determine if criminal charges are warranted.
Read the full New York State order here.