Standard Chartered Said to Agree to N.Y. Monitor Demand
Standard Chartered Plc has agreed to a New York Department of Financial Services demand that the bank hire an outside monitor to ensure compliance with U.S. anti- money laundering laws, according to a person familiar with the matter.
The agreement on the monitor, mandated by the regulator in an Aug. 6 order, stems from negotiations between the bank and state officials ahead of an Aug. 15 hearing at which Standard Chartered will be asked to explain why its license to do business in New York shouldn’t be revoked. New York banking Superintendant Benjamin Lawsky alleged London-based Standard Chartered flouted U.S. banking laws as part of a decade-long deception, helping launder about $250 billion in Iranian funds in contravention of U.S. statutes and without proper disclosure.
Lawsky is said to seek as much as $700 million to settle the investigation, another person familiar with the case said. The regulator’s threat panicked the bank’s investors, sent its share price down about 16 percent the day after and provoked a defiant response from Standard Chartered Chief Executive Officer Peter Sands, who said the vast majority of wire transfers identified by Lawsky complied with federal law. The bank’s stock fell about 10 percent last week.
According to the terms of the order, the state regulator will select the monitor, and the bank will pay for it and provide access to all compliance and transaction records. Lawsky hasn’t yet decided which outside monitor should be hired, said the person familiar with requirement, who declined to be identified because the discussions are confidential.