* Bank, New York state regulators discussed settlement
* Regulators alleged bank hid transactions tied to Iran
* Bank prepares hearing to defend New York license Wednesday
By Carrick Mollenkamp
Aug 12 Standard Chartered Plc and New York state
regulators have discussed a settlement amount to resolve an
inquiry into whether the British bank's records improperly hid
transactions tied to Iran even as the bank prepares for a
hearing to defend its New York license, according to sources
familiar with the situation.
The dual tracks highlight the uncertainty of the situation
facing Standard Chartered as it enters a second week at
odds with New York's Department of Financial Services, which
alleged Aug. 6 the bank hid transactions tied to Iran. The state
agency, headed by Benjamin Lawsky, ordered the bank to explain
why it shouldn't lose its license at a hearing scheduled for
Standard Chartered vehemently disagrees with the agency's
allegation the bank improperly processed $250 billion tied to
Iran, which Lawsky cited in his order issued Aug. 6. The heart
of his order, however, alleges the bank violated state laws when
it concealed records of transactions from bank examiners.
The talks could still collapse, and the hearing also could
be postponed to allow more time for negotiations, according to
the sources familiar with the matter.
The bank, meanwhile, already was cooperating in a separate
probe dating to 2010 that included the U.S. Justice Department
and Manhattan district attorney. That investigation is aimed at
determining whether Standard Chartered violated U.S. sanctions
laws and a settlement discussion has been occurring separately
from the state discussions.
A settlement with New York would end a period of turmoil for
the bank and law enforcement officials and likely would result
in a multimillion-dollar fine for Standard Chartered. A
settlement with federal officials also could result in a
Officials for the Justice and Treasury departments and the
Manhattan district attorney either weren't available for comment
or declined to comment.
Lawsky's order cited communications between Standard
Chartered officials about the reputational and legal threats to
the bank if it kept doing business with Iranian clients.
Spokespersons for Lawsky's department and Standard Chartered
declined to comment.
Faced with similar accusations, some banks prefer to quietly
settle. Barclays Plc, Credit Suisse Group,
Lloyds Banking Group, J.P. Morgan Chase & Co. and
ING Bank NV had agreed in prior years to settlements
totaling nearly $2 billion into how those banks allegedly
processed money or assets tied to sanctioned countries.
Standard Chartered, by comparison, said last week that
Lawsky's "interpretation" that the bank had improperly handled
Iranian transactions was "incorrect as a matter of law."
Lawsky's office alleged the bank had hidden from regulators
some $250 billion in improper transactions tied to Iran. The
bank said that total amount that didn't adhere to U.S. sanction
laws was less than $14 million.
More recently, the bank has gone quiet. Chief executive
Peter Sands was scheduled to appear on CNBC on Thursday but that
appearance was postponed. The network said at the time the bank
had emailed to say Sands couldn't appear because of "logistical