NEW YORK (Reuters) - Standard Chartered Plc has agreed to pay $340 million to settle allegations that it hid transactions with Iran from regulators, the New York Department of Financial Services said on Tuesday.
The announcement capped a week of intense negotiations and came less than 24 hours before the London-based bank was scheduled to defend itself against the allegations at a hearing in New York.
New York Financial Services Superintendent Benjamin Lawsky on August 6 alleged the bank had hidden Iran-linked transactions with a total value of $250 billion and called it a "rogue institution" for breaking U.S. sanctions laws.
The allegations, and a threat to revoke its license to do business in New York state, hit the bank's share price last week. Chief Executive Peter Sands strongly denied the charges and said illegal transactions totaled less than $14 million.
In its announcement on Tuesday, the department said the bank had "agreed that the conduct at issue involved transactions of at least $250 billion."
The bank did not immediately comment on the announcement.
In addition to the civil penalty, the bank agreed to install a monitor for at least two years to check on money-laundering risk controls in its New York branch, the department said in a statement.
The department said it had adjourned Wednesday's hearing, at which it had asked Standard Chartered to demonstrate why its license to do business in New York should not be revoked.
The aggressive stance taken by Lawsky heightened his public profile just months after his department was created. But it also produced a significant amount of collateral damage that could take months to repair.
His order against Standard Chartered sparked a trans-Atlantic row over whether U.S. regulators were hell-bent on investigating British banks. It also jumped ahead of federal regulators, which had spent more than two years investigating the bank. Lawsky now must deal with those regulators, who were angered by his move and who have yet to announce a settlement with Standard Chartered.
In the end, Lawsky's office won a settlement that was on par with fines paid by a handful of other banks that had improperly done business with sanctioned states such as Iran and Cuba. In 2010, Barclays Plc paid $298 million to settle a U.S. probe.
Lloyds Banking Group and Credit Suisse Group have previously agreed to pay settlements of $350 million and $536 million, respectively. ING Bank NV also paid a settlement. HSBC Holdings Plc currently is under investigation by U.S. law enforcement, according to bank regulatory filings.
(Reporting by Karen Freifeld; Additional reporting by Carrick Mollenkamp; Writing by Eddie Evans, editing by Bernard Orr)
Source: http://news.yahoo.com/standard-chartered-ceo-takes-charge-iran-probe-talks-101144709--finance.html
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