On August 7, 2012, the New York State Department of Financial Services issued an order, alleging that for almost ten years Standard Chartered Bank (SCB), a wholly owned subsidiary of Standard Chartered plc conspired with the Government of Iran and hid from regulators roughly 60,000 secret transactions, involving at least $250 billion, and making SCB hundreds of millions of dollars in fees.
The Superintendent of the New York State Department of Financial Services has scheduled a hearing for August 15, 2012, whereby SCB must (1) appear and explain apparent violations of law; (2) demonstrate why SCB's license to operate in the State of New York should not be revoked; (3) demonstrate why SCB's U.S. dollar clearing operations should not be suspending pending a formal license revocation hearing; and (4) submit to and pay for an independent, on-premises monitor of the Department's selection to ensure compliance with rules governing the international transfer of funds.
The order is likely to have important implications from a U.S. law enforcement and regulatory perspective, since Federal Reserve spokeswoman Barbara Hagenbaugh has said the Fed is working closely with various prosecutorial offices and other regulators on matters involving Iran and other sanctioned entities.