Feds Unhappy with N.Y. Action Against Bank Accused of “Scheming” with Iranians
Monday, August 13, 2012
New York State’s new banking regulator has made enemies in Washington after it went solo in going after a London-based bank caught laundering money for Iran.
Benjamin Lawsky, the head of the recently created New York State Department of Financial Services, went public with news of how Standard Chartered PLC allowed $250 billion in alleged money laundering transactions to flow through its New York subsidiary’s accounts from Iran.
The number of secret transactions totaled 60,000, which took place over nearly 10 years.
Lawksy’s action jeopardized ongoing negotiations between officials in the U.S. Department of the Treasury and those running Standard Chartered in England.
The bank could wind up losing its New York banking license, which could represent a crippling blow to the 160-year-old institution.
Federal regulators also were upset by Lawsky’s move because it exposed how banks like Standard Charter were able to launder money through U.S. accounts before federal law was changed in 2008. Up until then, it was easier for banks to disguise client identities and move their money offshore without officials in Washington catching on.
To Learn More:
Exclusive: U.S. Regulators Irate at NY Action Against Standard Chartered (by Carrick Mollenkamp and Emily Flitter and Karen Freifeld, Reuters)
In Laundering Case, a Lax Banking Law Obscured Money Flow (by Jessica Silver-Greenberg and Edward Wyatt, New York Times)
Standard Chartered and the Game of Cat-and-Mouse over Iran Sanctions (by Ian Barclay, The Guardian)
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