Shares in Standard Chartered slumped to a 3-year low of 10.92 pounds inLondon on Tuesday before closing down 16.4 percent at 12.28 pounds. Thestock has fallen by a quarter since news of the New York action on Monday.The loss of a New York banking license - effectively a permit to conducttransactions worth hundreds of billions of U.S. dollars
could be a death knellfor a global bank like Standard Chartered. The 160-year-old bank said it hasbeen in talks with U.S. authorities over its Iran transactions since early 2010 andthe sudden accusations by New York were a shock.In a statement on Monday, the bank said it was
“engaged in ongoing discussions
with the relevant U.S. agencies. Resolution of such matters normally proceedsthrough a coordinated approach by such agencies. The Group was thereforesurprised to receive the order from (the New York bank regulator) given that
discussions with the agencies were ongoing.”
Lawsky’s move also undercut the Treasury’s Office of Foreign Assets Control
(OFAC), which has made a priority of enforcing economic sanctions against Iran.
The surprise left the office’s leader, David Cohen
, the undersecretary forterrorism and financial intelligence, scrambling to come up with a response,sources said.NO QUIET DEAL
Standard Chartered, which sought the advice of one of New York’s top law firms,
had hoped that coming clean and turning over internal records to federalregulators would yield a settlement, sources said.
Those records also were turned over to New York’s bank regulator, which last
year was combined with an insurance agency to create the new financialwatchdog headed by Lawsky, a former prosecutor and aide to New YorkGovernor Andrew Cuomo.
Lawsky’s aim, according to the sources, was to cast more light on a bank’salleged transgressions. His agency, these people said, wasn’t interested in a
quiet pact of the sort reached by federal authorities in recent years.In 2010, for example, Barclays Plc BARC.L paid $298 million in a settlement with
regulators including the Treasury Department’s sanctions regulator and theManhattan district attorney’s office. The bank, in settlement documen
ts, said itcooperated in the probe.Barclays, like Standard Chartered, was advised by Sullivan & Cromwell, knownas the go-to New York law firm for banks facing regulatory scrutiny. The Barclayssettlement, while receiving news coverage, was a fairly bland document thatlisted the bank's transactions but few insider details, such as emails. Otherbanks, including Credit Suisse CSGN.VX and ING ING.AS,have settled in much
the same way with U.S. regulators.HUGE GULF