Standard Chartered shares struggle to rebound after US lawmaker triggered $3bn sell-off
Shares in Standard Chartered inched higher on Monday, but failed to fully recover from a dramatic sell-off at the end of last week that was triggered by a United States congresswoman.
The bank’s stock nudged up by one percent as markets opened, reaching 1,319.50. But, this remained far below the 1,407 price point prior to the sell-off on Friday, when shares tumbled by as much as nine percent.
The downturn came as New York Republican Elise Stefanik shared a letter on X calling for the attorney general to probe the bank over alleged terrorist payments.
Friday’s sell-off wiped $3bn (£2.21bn) off the bank’s market value as Stefanik lobbied for urgent action with the case against the lender set to expire August 19.
The London-listed bank said the allegations in a long-running civil case were “entirely false” and had been thrown out by US courts multiple times.
The case relates to a whistleblower lawsuit filed by Brutus Trading, which alleges that Standard Chartered illegally processed and hid billions of dollars in transactions for Iran and terrorist organisations.
Standard Chartered said: “The underlying allegations – including the claim that there are $9.6bn in unlawful transactions – are entirely false and have been rejected by the US courts multiple times. We expect the dismissal of this case will continue to be upheld on appeal.”
Standard Chartered’s price target unchanged
Joseph Dickerson, equity analyst at Jefferies, said: “The circumstances surrounding this case are not new – the so-called Brutus Trading case has been around since 2012.”
He added the “absence of new facts” meant the risk of US litigation “remains limited” for the bank. Jefferies reiterated their target price for the bank’s stock as 1640p.
Standard Chartered found itself in legal hotwater earlier this year after it was hit with a $2.7bn lawsuit over its alleged role in one of the world’s largest financial fraud cases, known as the 1MBD scandal.
Between 2009 and 2013, Standard Chartered allegedly allowed more than 100 suspicious transfers through its bank, despite warning signs that the money might be linked to illegal activity.
The bank said it “emphatically rejects any claims” made by the 1MDB companies, adding that the liquidators had publicly stated they were “shell companies with no legitimate business”.