Standard Chartered in race to reach settlement with US regulators

Standard Chartered, the UK bank accused of laundering money on behalf of Iran, is unlikely to reach a settlement with its American regulators before a scheduled hearing in New York on Wednesday, according to sources at the bank.

The British bank, which admits that it inadvertently broke US sanctions by processing $14m (£9m) in transactions with Iranian financial institutions in the US between 2001 and 2007, is looking to strike a deal with US regulators whereby it would admit some liability and pay a fine of around $5m.

But the New York State Department of Financial Services has accused Standard Chartered of processing illegal transactions worth $250bn and is said to be eyeing a fine closer to $500m. Also investigating the sanction breaches are the US Treasury, the Department of Justice, the Federal Reserve and the FBI.

"Our preference is to reach a settlement with all our regulators, but it seems quite a stretch to do this before Wednesday," said a source at the bank. "The timescale is out of our hands."

Contrary to reports, the bank has also not yet been informed by the New York regulator as to whether its chief executive, Peter Sands, will be required to attend Wednesday's hearing, where it will be asked to explain why it should be allowed to retain its US banking licence. Standard Chartered has also not been told whether the hearing will be public or private.

The New York regulator stunned the bank last week by accusing Standard Chartered of behaving as a "rogue institution" between 2001 and 2010 by performing transactions on behalf of Iranian interests.