Compliance Bits and Pieces – Standard Chartered Edition

The British bank Standard Chartered found itself in trouble for dealing with Iranian customers in violations of US sanctions. Here are some stories that covered the news.

Best. Quote. Ever. From Howard Sklar’s Open Air Blog

Preparing for This Week in FCPA today, I came across this quote in the New York State Department of Financial Services’ Order against Standard Chartered:

You fucking Americans. Who are you to tell us, the rest of the world, that we’re not going to deal with Iranians.

Bank Deal Rankles Regulators by Liz Rappaport, Devid Enrich and Victoria McGrane in the Wall Street Journal

Standard Chartered PLC’s money-laundering clash with a once-obscure New York regulator is shaking up efforts by financial overseers to rein in giant banks around the globe.

The New York Department of Financial Services notified the U.K. regulator for Standard Chartered just 90 minutes before announcing allegations last week against the U.K. bank, said people familiar with the matter.

British regulators said the lack of advance notice from New York regulator Benjamin M. Lawsky breached protocol.

Officials at the U.K. Financial Services Authority complained afterward to the New York regulator, which oversees Standard Chartered’s U.S. unit, that the sudden move could have damaged the stability of the bank and that the lack of advance notice breached long-standing protocol among bank regulators, these people said.

Standard Chartered Faces Suit From Victims of 1983 Beirut Bombing by David Benoit in WSJ.com’s Corruption Currents

The suit, filed Wednesday in Manhattan federal court, alleges the recently revealed claims that Standard Chartered helped Iran hide 60,000 financial transactions from U.S. regulators also kept assets hidden from the victims. The plaintiff group was awarded $2.66 billion in damages from Iran by a 2007 ruling from federal court in Washington D.C. that found Iran liable in the bombing.

Hush money in the Economist’s Schumpeter

It could have been disastrous. Standard Chartered was facing a hearing before New York state’s Department of Financial Services (DFS) on August 15th that would have certainly aired embarrassing information. Instead it will be expensive. The bank has acceded to a fast settlement of the charges that it had illicitly processed $250 billion in transactions with Iran, paying $340m in civil penalties and agreeing to various other provisions.

Lawsky Reveals Details Of Standard Chartered Bank Settlement by Steven Meyerowitz in the Financial Fraud Law blog

Benjamin M. Lawsky, New York Superintendent of Financial Services, has just announced that the New York State Department of Financial Services (“DFS”) and Standard Chartered Bank (“Bank”) have reached an agreement to settle the matters raised in the DFS Order dated August 6, 2012.

Significantly, Lawsky (pictured) said that, “[t]he parties have agreed that the conduct at issue involved transactions of at least $250 billion.”

This is signficant because in its initial public response, the Bank had indicated that it expected that the total transactions amounted to no more than $14 million. This concession alone is a huge win for Lawsky and the DFS.