Standard Chartered nears $300 million settlement over money laundering
The bank is not only set to make a sizeable payment but will also agree to an extension on how long it must continue to be monitored
Tuesday 19 August 2014
Standard Chartered is close to settling claims over further money laundering failings at a cost of up to another $300 million (£179 million).
It is believed that the bank, based in London, has reached a deal with Benjamin Lawsky, head of New York’s Department of Financial Services. He took $340 million from the bank two years ago and set up an independent monitor to ensure it improved its anti-money laundering processes.
This monitor has reportedly found that the bank still failed to spot some suspicious transactions even after it pledged to improve its controls.
Chief executive Peter Sands, pictured, admitted that it was in “ongoing discussions” with Lawsky’s department when Standard Chartered reported disappointing half-year results last month.
He said these centred on “certain issues with respect to the group’s post-transaction surveillance systems and money laundering controls.”
Today Standard Chartered declined to comment.
The bank is not only set to make a sizeable payment — of between $200 million and $300 million — but will also agree to an extension on how long it must continue to be monitored. This is likely to be for another two years.
Standard Chartered’s computer systems are meant to flag up any suspicious transactions both to the bank and to regulators. But it is reported that “millions” of transactions which should have been flagged up were not identified by the software.
The settlement will come as another blow to Sands, who has come under increasing pressure amid suggestions that shareholders want to see his successor identified and named.
That led to an unprecedented Stock Exchange announcement from the rest of the board, led by chairman Sir John Peace, denying there had been any calls for his departure and giving him their full backing.
Peace incurred the wrath of US regulators when he said the bank had committed “clerical errors” rather than having “wilful” intention to break rules.
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