The New York State Department of Financial Services (“DFS”) and Standard Chartered Bank (“Bank”) have reached an agreement to settle the matters raised in the DFS Order dated August 6, 2012. The parties have agreed that the conduct at issue involved transactions of at least $250 billion.
The settlement also includes the following terms:
· The Bank shall pay a civil penalty of $340 million to the New York State Department of Financial Services.
· The Bank shall install a monitor for a term of at least two years who will report directly to DFS and who will evaluate the money-laundering risk controls in the New York branch and implementation of appropriate corrective measures. In addition, DFS examiners shall be placed on site at the Bank.
· The Bank shall permanently install personnel within its New York branch to oversee and audit any offshore money-laundering due diligence and monitoring undertaken by the Bank.
The hearing scheduled for August 15, 2012 is adjourned.
We will continue to work with our federal and state partners on this matter.The bank had been accused of violating American banking rules that limit dealings with Iran to the tune of $250 billion. The bank had strongly rejected such accusations by Mr. Lawsky, and led to many of Mr. Lawsky’s fellow regulators suggesting that he had gone rogue.
So the settlement today is a likely win for Mr. Lawsky and for Andrew Cuomo, who created the Dept. of Financial Services by merging two agencies and who then appointed Mr. Lawsky, a former top aide, as the agency’s head. And in a statement, Mr. Cuomo had high praise for the agency’s work.
We created the Department of Financial Services because we believed that New York needed a tough and fair regulator for the banking and insurance industries to protect consumers and investors. I also believe a credible regulator actually benefits financial companies by ensuring investor confidence in the integrity of the marketplace.
This state and nation are still paying the price for a failed regulatory system and that must not happen again. This result demonstrates the effectiveness and leadership of the new Department of Financial Services, and I commend the state legislature for creating a modern regulator for today’s financial marketplace.