Standard Chartered shares tumble after Iran claims

Standard, one of the top five largest banks in the UK by market value, said it “strongly rejects the position or the portrayal of facts” set out in the order by the New York state’s Department of Financial Services.

Its shares slumped by 24 per cent on Tuesday on top of the 6 per cent decline after the accusations were made just before the close of the London market on Monday.

The bank, which employs nearly 90,000 people worldwide, has been called to appear before regulators to explain the apparent violations and defend its licence to trade on the New York Stock Exchange.

The investigation’s findings come after fellow British bank HSBC was accused of allowing drug cartels and rogue states to launder billions of pounds through its US arm.

‘Rogue institution’

In its findings report, the regulator said: “In short, SCB (Standard Chartered Bank) operated as a rogue institution.”

The findings include a memo sent in October 2006 from the bank’s US chief executive to the group executive director in London raising concerns about the activities with Iran.

He said: “Firstly, we believe (the Iranian business) needs urgent reviewing at the group level to evaluate if its returns and strategic benefits are… still commensurate with the potential to cause very serious or even catastrophic reputational damage to the group.”

He added: “Secondly, there is equally importantly potential of risk of subjecting management in US and London (for example you and I) and elsewhere to personal reputational damages and/or serious criminal liability.”

To which the group executive director allegedly replied: “You f****** Americans. Who are you to tell us, the rest of the world, that we’re not going to deal with Iranians.”

‘Information stripped’

The regulator claims that between January 2001 through to 2010, Standard Chartered conspired with Iranian clients to route payments through New York after first stripping information from wire transfer messages used to identify sanctioned countries.

The bank moved the transactions through its New York branch on behalf of Iranian financial institutions that were subject to US economic sanctions, and then covered up the dealings, the banking regulator claimed.

The institutions included the Central Bank of Iran, as well as Bank Saderat and Bank Melli, both of which are also Iranian state-owned institutions.

A statement from Standard Chartered said: “As reported previously, the group is conducting a review of its historical US sanctions compliance and is discussing that review with US enforcement agencies and regulators.

“The group cannot predict when this review and these discussions will be completed or what the outcome will be.”

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