Standard Chartered shares tumble 16% on money laundering allegations

Written on:August 7, 2012
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Standard Chartered

Standard Chartered accused of hiding Iran dealings

Standard Chartered shares in London Stock Exchange plunged to over 16% in the early trading on Tuesday, following allegations by New York State Department of Financial Services (NYDFS) that the bank’s US arm “schemed” with Iran’s government to hide illegal transactions as much as $250 billion (£160 billion) over nearly a decade.

British banking giant’s shares fell more than 6% after the New York state Department of Financial Services (NYDFS) issued an order just before the London market closed, saying that Standard Chartered had hidden 60,000 such secret transactions, threatening to revoke the license of bank.

Shares of Standard Chartered also fell as much as 7.5% in Hong Kong in early trade, hitting the lowest level in more than two and a half years. The price drop comes despite Standard Chartered rejecting the allegations, saying that it “strongly rejects the position or portrayal of facts as set out in the order” issued by the regulator.

The London-based bank added that it had previously told the US authorities, including the NYDFS, that it had initiated a review of its compliance record which was “focused primarily on transactions related to Iran”.

However, the US-based agency labelled Standard Chartered a “rogue institution” and has ordered officials of bank’s US arm to “explain these apparent violations of law” at a hearing on August 15.

Standard Chartered is the second UK bank in two months to face allegations of money laundering. Last month US Senate investigation accused HSBC of violating anti-money-laundering rules.

Related:
Standard Chartered predicts fall in first half profits
HSBC financed drug trafficking deals, says US Senate report
HSBC faces £645 million penalty for money laundering

     

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