[h=3]By LIZ RAPPAPORT[/h]Standard Chartered PLC agreed to pay New York's top banking regulator $340 million, averting a public showdown and ending a weeklong, trans-Atlantic regulatory drama.
After a harried week of debate, the U.K.'s fifth-largest bank by assets reached a settlement with New York's Superintendent of Financial Services, Benjamin M. Lawsky. The agreement came eight days after Mr. Lawsky accused the bank of illegally scheming over a decade to hide more than 60,000 financial transactions totaling $250 billion for Iranian clients.
Four other U.S. regulators that have been probing the bank's actions weren't part of the settlement. The U.S. Treasury Department, the Federal Reserve, the U.S. Department of Justice and the Manhattan District Attorney's office have been negotiating with Standard Chartered since 2011 to reach a settlement over its Iran-related transactions.
As part of the settlement, Standard Chartered agreed to install a monitor chosen by Mr. Lawsky's office to oversee its international transactions. The bank also agreed to appoint its own auditors in its New York office to oversee compliance with U.S. money-laundering laws. The bank acknowledged that the settlement covers $250 billion of transactions that the company handled for Iranian clients.
As a result of the deal, a hearing that was scheduled for Wednesday at the New York regulator's office in Manhattan was called off.
Mr. Lawsky last Monday threatened to revoke the license of Standard Chartered Bank, the New York-based unit of the international bank. In an unusual public counterattack, some U.K. political figures accused the regulator of seeking to undermine London as a financial center, and Bank of England governor Mervyn King urged against a rush to judgment.
The bank said last week that the regulators's allegations were factually incorrect. Instead of $250 billion in masked transactions alleged by the regulator, Standard Chartered said it found in an internal review that only $14 million were improper during the decade under review.
Earlier this year, the bank had offered just $5 million to settle Mr. Lawsky's allegations, said people familiar with the matter. It's unclear if the bank made the same offer to other regulators. Standard Chartered Chief Executive Peter Sands traveled to New York this week to deal with the dustup, said people familiar with the matter.
The settlement comes after the bank and other regulators spent the past week digesting Mr. Lawsky's action, which was announced Aug. 6 after the stock market was closed in London. Standard Chartered, whose shares dropped as much as 26% the following day when trading resumed, had been in discussions with all of the regulators investigating its Iranian transactions and said it was surprised by Mr. Lawsky's order. The stock has since recovered much of its early losses, leaving it 7% below its Aug. 6 level.
Write to Liz Rappaport at [email protected]
After a harried week of debate, the U.K.'s fifth-largest bank by assets reached a settlement with New York's Superintendent of Financial Services, Benjamin M. Lawsky. The agreement came eight days after Mr. Lawsky accused the bank of illegally scheming over a decade to hide more than 60,000 financial transactions totaling $250 billion for Iranian clients.
Four other U.S. regulators that have been probing the bank's actions weren't part of the settlement. The U.S. Treasury Department, the Federal Reserve, the U.S. Department of Justice and the Manhattan District Attorney's office have been negotiating with Standard Chartered since 2011 to reach a settlement over its Iran-related transactions.
As part of the settlement, Standard Chartered agreed to install a monitor chosen by Mr. Lawsky's office to oversee its international transactions. The bank also agreed to appoint its own auditors in its New York office to oversee compliance with U.S. money-laundering laws. The bank acknowledged that the settlement covers $250 billion of transactions that the company handled for Iranian clients.
As a result of the deal, a hearing that was scheduled for Wednesday at the New York regulator's office in Manhattan was called off.
Mr. Lawsky last Monday threatened to revoke the license of Standard Chartered Bank, the New York-based unit of the international bank. In an unusual public counterattack, some U.K. political figures accused the regulator of seeking to undermine London as a financial center, and Bank of England governor Mervyn King urged against a rush to judgment.
The bank said last week that the regulators's allegations were factually incorrect. Instead of $250 billion in masked transactions alleged by the regulator, Standard Chartered said it found in an internal review that only $14 million were improper during the decade under review.
Earlier this year, the bank had offered just $5 million to settle Mr. Lawsky's allegations, said people familiar with the matter. It's unclear if the bank made the same offer to other regulators. Standard Chartered Chief Executive Peter Sands traveled to New York this week to deal with the dustup, said people familiar with the matter.
The settlement comes after the bank and other regulators spent the past week digesting Mr. Lawsky's action, which was announced Aug. 6 after the stock market was closed in London. Standard Chartered, whose shares dropped as much as 26% the following day when trading resumed, had been in discussions with all of the regulators investigating its Iranian transactions and said it was surprised by Mr. Lawsky's order. The stock has since recovered much of its early losses, leaving it 7% below its Aug. 6 level.
Write to Liz Rappaport at [email protected]