Full-Text Order in NYS v. Standard Chartered Bank Online at BrokeAndBroker.com

August 6, 2012

On August 6, 2012, the New York State Department of Financial Services issues an Order seeking to sanction the Standard Chartered Bank for violations of state banking regulations.  The allegations against Standard Chartered are particularly stunning given that they emanate from New York State and involve allegations at the bank's New York City branch -- all the more charged with emotion because of the 9/11 tragedy. 

READ the full text of this dramatic action at: In the Matter of STANDARD CHARTERED BANK, NEW YORK BRANCH (New York State Department of Financial Services, Order Pursuant to Banking Law Section 39, August 6, 2012).

NOTE: The allegations in the Order are not proof of those charges and the bank is entitled to the presumption of innocence unless and until proven guilty.

Consider these direct quotes from the opening portions of the Order:

For almost ten years, SCB schemed with the Government of Iran and hid from regulators roughly 60,000 secret transactions, involving at least $250 billion, and reaping SCB hundreds of millions of dollars in fees. SCB's 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.

Having determined that good cause exists, the Superintendent has directed SCB to: (1) appear and explain apparent violations of law; (2) demonstrate why SCB's license to operate in the State of New York should not be revoked; (3) demonstrate why SCB's U.S. dollar clearing operations should not be suspended pending a formal license revocation hearing; and (4) submit to and pay for an independent, on-premises monitor of the Department's selection to ensure compliance with rules governing the international transfer of funds.

. . .

1. For nearly a decade, SCB programmatically engaged in deceptive and fraudulent misconduct in order to move at least $250 billion through its New York branch on behalf of client Iranian financial institutions ("Iranian Clients") that were subject to U.S. economic sanctions, and then covered up its transgressions. These institutions included no less than the Central Bank of Iran/Markazi ("CBI/Markazi"), as well as Bank Saderat and Bank Melli, both of which are also Iranian State-owned institutions.

. . .

8. Lest there be any doubt, SCB's obvious contempt for U.S. banking regulations was succinctly and unambiguously communicated by SCB's Group Executive Director in response. As quoted by an SCB New York branch officer, the Group Director caustically replied: "You f---ing Americans. Who are you to tell us, the rest of the world, that we're not going to deal with Iranians. 

6 Note of Interview with SCB's Head of Cash Management Services (2002-2005), Head of Compliance (2005-2007) at the New York branch, SCB INT 0004733-4734.