Standard Chartered faces money laundering charge
Source: Agencies |
August 8, 2012, Wednesday
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Print Edition
Print Edition
STANDARD Chartered Plc saw around 8 billion pounds (US$12.5 billion) wiped off its market value yesterday after the New York state regulator accused the UK bank of being involved in laundering money for Iran, dealing a further blow to the City of London's reputation as a financial center.
The charges against Standard Chartered were a shock for a bank which proudly described itself recently as "boring" - its share price tanked 23 percent to 11.33 pounds by early afternoon trading on the London Stock Exchange.
The falling share price also affected the main FTSE 100 index in London, which was one of the only European leading indexes to trade lower - Standard Chartered makes up 1.5 percent of the index's overall market value. In Hong Kong, where the bank's shares are also listed, they finished 14.9 percent lower.
The storm surrounding Standard Chartered is the latest in a summer of scandals for London - one of the world's leading financial centers. Bob Diamond, the chief executive of Barclays, was forced to quit after his bank manipulated a key interbank interest rate. HSBC has been fined for failing to stop money-laundering in Mexico, and US bank JPMorgan suffered a huge trading loss in its London office.
New York State Department of Financial Services alleged on Monday that Standard Chartered schemed with the Iranian government to launder US$250 billion from 2001 to 2007, leaving the US financial system "vulnerable to terrorists."
Standard Chartered said it "strongly rejects" the allegations. In a statement, the bank said "well over 99.9 percent" of the questioned transactions with Iran complied with all regulations, and the exceptions amounted to US$14 million.
Last week, Standard Chartered's Chief Executive Peter Sands boasted that the bank has racked up a 10-year string of record first-half profits "amidst all the turbulence in the global economy and the apparently never-ending turmoil in the world of banking."
The New York regulator ordered Standard Chartered representatives to appear in New York City on August 15 "to explain these apparent violations of law" and to demonstrate why its license to operate in the state of New York "should not be revoked."
The charges against Standard Chartered were a shock for a bank which proudly described itself recently as "boring" - its share price tanked 23 percent to 11.33 pounds by early afternoon trading on the London Stock Exchange.
The falling share price also affected the main FTSE 100 index in London, which was one of the only European leading indexes to trade lower - Standard Chartered makes up 1.5 percent of the index's overall market value. In Hong Kong, where the bank's shares are also listed, they finished 14.9 percent lower.
The storm surrounding Standard Chartered is the latest in a summer of scandals for London - one of the world's leading financial centers. Bob Diamond, the chief executive of Barclays, was forced to quit after his bank manipulated a key interbank interest rate. HSBC has been fined for failing to stop money-laundering in Mexico, and US bank JPMorgan suffered a huge trading loss in its London office.
New York State Department of Financial Services alleged on Monday that Standard Chartered schemed with the Iranian government to launder US$250 billion from 2001 to 2007, leaving the US financial system "vulnerable to terrorists."
Standard Chartered said it "strongly rejects" the allegations. In a statement, the bank said "well over 99.9 percent" of the questioned transactions with Iran complied with all regulations, and the exceptions amounted to US$14 million.
Last week, Standard Chartered's Chief Executive Peter Sands boasted that the bank has racked up a 10-year string of record first-half profits "amidst all the turbulence in the global economy and the apparently never-ending turmoil in the world of banking."
The New York regulator ordered Standard Chartered representatives to appear in New York City on August 15 "to explain these apparent violations of law" and to demonstrate why its license to operate in the state of New York "should not be revoked."
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