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Standard Chartered banned from dealing with high-risk clients as part of $300m settlement
For Standard Chartered (SC), $300m is not enough to sate the regulators.
In addition to the settlement, the New York Department of Financial Services (DFS) has blocked the UK bank from dealings with certain high-risk clients, including some Hong Kong business customers and others in the United Arab Emirates.
SC will also not be permitted to accept new customers for dollar clearing, without first running it past the DFS.
The strict conditions date back two years to the allegations of money laundering that swirled around the bank's New York branch. From the bank's announcement:
The settlement provisions are summarised as follows:· A civil monetary penalty of USD300m· Enhancements to the transaction surveillance system at the New York branch· A two-year extension to the term of the DFS-appointed independent compliance monitor· A set of temporary remediation measures
These remediation measures will remain in place until the transaction surveillance system's detection scenarios are operating to a standard approved by the monitor.
Under the terms of the 2012 deal between SC and the DFS, an independent monitor is required to oversee SC's dealings and ensure anti-money-laundering rules are followed.
Standard Chartered has endured a fairly torrid past twelve months. According to the Financial Times, chief executive Peter Sands is working with his head on the block, with his future to be decided by second-half results.
The FT says the information comes from a top-ten shareholder, who can't have been happy with SC's share performance over the last year.