FTSE 100 bank Standard Chartered was hit today with fresh whistleblower allegations that it was involved in transactions worth $100 billion, which financed some of the world’s most notorious terrorist groups.
The claims were made in US court papers and relate to thousands of transactions between 2008 and 2013 and allege that sanctions against Iran were broken.
They include foreign exchange deals worth around $9.6 billion involving people or companies which the US government linked with funding Hamas, Hezbollah, the Taliban and al-Qaeda.
The whistleblowers claim that the transactions at the centre of the latest allegations were found after they re-examined material previously sent to US authorities in 2012.
It centred on allegations that US was broken when by millions of dollars were moved for groups in Iran and other countries when under sanctions. Standard Chartered’s $227 million settlement with regulators allowed it to avoid criminal charges.
One of the whistleblowers – Julian Knight, a former Standard Chartered executive – ran a transaction services unit there between 2009 and 2011. He now disputes a denial from US officials that the latest claims were shown in data he previously provided to them, covering around 500,000 transactions, which he says were missed by investigators. These are the basis of the renewed action against the bank.
Standard Chartered denies them, and says it is confident that the court will dismiss the claims. It has previously said business with Iran stopped in 2007.
The bank has paid out around $2 billion since 2012 over matters relating to sanctions violations. It was fined over $1 billion in 2019 for past conduct and control issues, which related to money laundering..
Then, its CEO Bill Winters said the bank “put these historical issues behind us”, and that they were not representative of the Standard Chartered I am proud to lead.”
The latest legal move is an attempt to overturn the US Supreme Court’s refusal to hear the case, which in effect ended the appeals process. The new legal move involves overturning the original judgement and it also accuses the US government of fraud relating to the evidence presented in it.
Nonetheless, the $100 billion headline figure in the court papers rippled out across the City, where a range of banks have been hit with big fines in recent years for breaking rules.
The list of banks fined by regulators for breaking anti-money laundering regulations is broad. NatWest was fined £265 million in 2021 after a Bradford-based jeweller, Fowler Oldfield, deposited hundreds of millions in cash. No action was taken at the bank, despite employees reporting concerns.
Deutsche Bank was fined £163 million in 2013 for failing to run adequate anti-money laundering procedures between 2012 and the end of 2015. Credit Suisse paid over £147 million for due diligence failings over loans worth $1.3 billion arranged for Mozambique.
Standard Chartered’s statement today said: “This filing is another attempt to use fabricated claims against the bank, following previous unsuccessful attempts.
“The false allegations underpinning it have been thoroughly discredited by the US authorities who undertook a comprehensive investigation into the claims and said they were ‘meritless’ and did not show any violations of US sanctions. We are confident the courts will reject these claims, as they have already done repeatedly.”
Its shares fell 21p to 755p, a drop of almost 3%.
