Standard Chartered to pay $327 million in U.S. sanctions case

Mon Dec 10, 2012 4:46pm EST
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By Aruna Viswanatha

WASHINGTON (Reuters) - Standard Chartered Plc agreed to pay $327 million to resolve allegations that it violated U.S. sanctions against Iran, Sudan and two other countries, capping months of legal headaches for the British bank.

The U.S. Justice Department and the New York District Attorney's office said on Monday the bank moved millions of dollars through the U.S. banking system on behalf of customers in the four sanctioned countries.

The fine came on top of a separate payment of $340 million made in August by Standard Chartered to New York's state banking regulator over Iranian sanctions.

Taken together, the two penalties could almost wipe out the bank's profit growth this year. Nevertheless, its shares nudged higher after Monday's announcement, which was in line with payment provisions the bank disclosed last week.

Another British bank, HSBC Holdings Plc, is expected as early as Tuesday to pay around $1.8 billion to resolve U.S. money-laundering allegations, according to people familiar with the planned announcement. The two settlements are part of a growing crackdown of how banks process illicit transactions for certain customers.

Standard Chartered said in a statement the settlement followed nearly three years of "intensive cooperation with regulators and prosecutors."

The scandal erupted in early August, when New York banking Superintendent Benjamin Lawsky said Standard Chartered was a "rogue institution" that had shown contempt for banking regulations, leaving the United States vulnerable to terrorists, weapons dealers and corrupt regimes.

At the time, Lawsky accused the bank of hiding certain information on $250 billion worth of transactions involving Iran and threatened to revoke its state banking license.   Continued...

A woman walks past a Standard Chartered bank in London October 13, 2010. REUTERS/Stefan Wermuth