Closes Investigations by Federal & NY State Prosecutors.

[ by Howard Haykin ]

Standard Chartered Plc, a 150-year old British bank, concluded months of headaches by agreeing to a deal on Monday over charges by the U.S. Justice Department and the New York Attorney General's office that it had illegally funneled money through the U.S. financial system on behalf of customers in Iran, Sudan, Libya and Burma, in violation of sanctions laws. 

Bank Will Pay $327 Million.   Monday's deal will cost the bank $227 million, while a separate deal with the U.S. Federal Reserve will cost the bank $100 million.  The Fed alleged that the bank provided "inadequate and incomplete responses" to bank examiners and provided insufficient oversight of its sanctions compliance program.  The DOJ and NY AG both agreed to defer and drop the charges if the bank improves its sanctions compliance and forfeits $227 million. 

NY District Attorney Cyrus Vance issued the following forceful statement regarding the settlement:  "These cases give teeth to sanctions enforcement, send a strong message about the need for transparency in international banking, and ultimately contribute to the fight against money laundering and terror financing."

Not to be Outdone by its Regulatory Peers, The Treasury ... entered into a settlement with Standard Chartered over allegations that its London and Dubai offices violated US sanctions against the 4 countries at issue.  The Treasury arrived at a $132 million penalty, but will not seek to collect it, because it deems the fine as having been satisfied by the DOJ penalyty.

The DOJ-NYAG-Fed settlements come several months after the bank agreed to pay $340 million to resolve a related case brought by the New York banking regulator.  That one was in August, after the New York Department of Financial Services broke from the pack of fellow regulators to file a surprise order accusing the bank of hiding some $250 billion worth of transactions with Iran.

The action on Monday alleges that the bank moved "more than $200 million" through the US financial system, primarily on behalf of Iranian and Sudanese clients.

For further details, go to:   [Reuters, 12/10/12] and [Dealbook, 12/10/12].