Standard Chartered faces more fines from US regulator
Thursday, August 7th, 2014 By
The multinational bank Standard Chartered has warned it faces further fines, remedial action and an extended monitoring period as New York’s financial regulator found problems with its anti-money laundering controls.
Computer faults were found in Standard Chartered’s surveillance system, in what is the second time in two years the bank has been under investigation from US regulators.
The bank agreed a $340 million (£201m) settlement with the New York State Department of Financial Services (DFS) in 2012 for breaking US sanctions by hiding transactions linked to Iran.
It has been monitored closely since the revelation, but chief executive, Peter Sands believes the current faults are not as severe as the mistakes made previously.
“We do not believe the impact to be of the same scale as the very different issues the group faced two years ago,” Sands told Reuters.
It is not yet clear what the exact cost of the fine will be but experts expect it to be less than the amount the bank had to pay in 2012.
The news led to angered protests by a top banker at Standard Chartered, who said bankers are being treated as “criminals”.
Jaspal Bindra, who runs Standard Chartered’s business in Asia, told Reuters, “Banks have been asked to play the role of policing anti-money laundering … [but when] we have a lapse we don’t get treated like a policeman, we are treated like a criminal.”
The news follows the release of the bank’s half-year results on Wednesday, which show first-half profits were 20% lower than the same period in 2013.
The bank admits 2014 has been a challenging year, and notes it is taking a number of actions including completely reorganising the bank over the last six months to make it “fitter” and “more flexible”.
Sands said, “Our performance this first half is clearly disappointing. We’re taking action on multiple fronts, both in response to near term pressures and to execute our refreshed strategy, with the objective of getting back to a trajectory of sustainable, profitable growth.”
Lloyds bank has also received hefty fines, with the Financial Conduct Authority charging the bank £28 million for failings in its control of sales incentive schemes in 2013.
Chancellor George Osborne pledged to crack down on those committing wrongdoings in the UK financial sector in June, following allegations of rate-rigging in the financial markets.
Photo: Erwin Soo via Flickr
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