http://www.reuters.com/article/2012/08/0...News&rpc=71

New York may suspend Standard Chartered over Iran dealings

http://www.nytimes.com/2012/08/07/busine...h-iranians.html



w.o.w.

And yet, how many little banks are going to get increased scrutiny whether or not they run OFAC on a $50 check being cashed by the gardener of one of their customers?

If I hear regulators using the term "risk-based" one more time, I want to find one of those operating manuals to throw at them.

And yet, how many little banks are going to get increased scrutiny whether or not they run OFAC on a $50 check being cashed by the gardener of one of their customers?

All of us including the big guys,

One common thread I have noticed for the big guys is that the issuse were started by the sister/parent bank. How many of the little guys claim this issue.

Without getting into the international politics of that statement, I think it's that sort of attitude that may run deep behind many of these big OFAC/AML cases that get such huge press. Have you noticed that most of these banks are headquartered outside the U.S.?

Like it or not, the U.S. is still a key money center player, and those foreign banks would have a rough go of it without their U.S. branches or correspondents. As the old saying goes, if you want to play on our turf, you play by our rules.

"IT IS NOW HEREBY ORDERED that, pursuant to Banking Law 39(1), SCB shall appear before the Superintendent or his designee on Wednesday, August 15, 2012, at 10:00A.M., at the Department’s offices located at One State Street Plaza, New York, NY 10004, to explain these apparent violations of law and to demonstrate why SCB’s license to operate in the State of New York should be revoked; and

IT IS HEREBY FURTHER ORDERED that on August 15, 2012, SCB shall also demonstrate why, pursuant to Banking Law 40(2), SCB’s U.S. dollar clearing operations should not be suspended pending a formal license revocation hearing;"

I guess all vacations are cancelled.

No. All vacations are mandatory to begin on August 14th. A trip out of the country is highley encouraged. Don't forget to get your bonus before you leave!

Exactly. If they want to run Iranian transactions solely in their overseas branches and NOT have any of them run through their systems in the U.S., that would be one thing. But I guess it turns out that they DO touch our shores which is why they had to have entire friggin' OPERATING MANUAL on how to scrub them!

So my next question is - why IS it that their STATE regulatory agency found it? Who is their FEDERAL regulator? Is it the same regulator that pounds a little bank because they didn't do an OFAC scrub for First American Title Insurance Company? Or the Los Angeles Department of Water and Power? Or Verizon?

Here is the order in case you are interested.

Standard Chartered Order

Looks like Deloitte was complicit in this mess.

'SCB asked D&T to delete from its draft “independent” report any reference to certain types of payments that could ultimately reveal SCB’s Iranian U-Turn practices. In an email discussing D&T’s draft, a D&T partner admitted that “we agreed” to SCB’s request because “this is too much and too politically sensitive for both SCB and Deloitte. That is why I drafted the watered-down version.”'

OH WOW!!! Standard Charter is one thing - D&T being complicit, now that is going to be some real news if they get formally drawn into this deal. This would toast them, as any independent audit that have performed would be suddenly suspect. This could be as big a WorldCom or Enron and the death of Arthur Andersen.

If I remember correctly, D & T's Global AML Director is ex DOJ. A major player in the AML world. The way it's quoted suggests the state has the actual emails. If that's true, I would agree with Randy that they are finished in the AML world.

I hate to say this but I see little banks and slightly larger banks all the time who can't even explain how OFAC is managed in their product lines around the bank. Can't say how it is checked, documented, cleared or how they can prove compliance.

More information on Deloitte's involvement

Deloitte

Wow!!!

I agree.

Big 3 anyone?

The webinars are already being planned.

Webinar on Standard Chartered

Also see another point of view on Standard Chartered.

Standard Chartered - Another View

And here is what bothers me - a lot of small and regional banks have put a lot of time, money and effort into BSA programs with constant prodding and pressure from the regulatory agencies. And every year it seems that no matter what you have done, the examiners expect more.

And yet we have recently seen 3 very high level cases (ING, HSBC and now Standard Chartered) where it appears the examiners were asleep at the switch. So now we will all get whipped into an even higher frenzy for BSA/AML compliance.

And again I must ask "WHAT EVER HAPPENED TO RISK-BASED BSA???"

Or - How much will we have to pay for these latest lapses by the regulators?

Reading the Order is unbelievable.....

more on Deloitte

http://www.forbes.com/sites/francinemcke...ofit-above-all/

Princess Romeo, don't forget RBS

RBS Being Probed

And here is the Bank's response:

Standard Chartered asserts that the DFS's interpretation "is incorrect as a matter of law"

Someone needs to break out the margaritas and popcorn. This could be fun to watch.

Okay. They have blamed bank management, the regulators and Deloitte. Last but not least, they can blame the lawyers.

Blame the Lawyers

This has all the makings of a food fight. An ambitious regulator, London bank arrogance, shady accountants (that's become an ironically redundant phrase of late) and obfuscatory lawyers -- all pointing the finger of blame at one another.

Things are getting ugly in the sandbox. The interesting thing here is that if the payment messages were "cleaned up" in the UK before even getting to NY, how would the US regulators uncover these Iranian U-Turn payments?

Standard Chartered Bank begins fightback on Iran allegations

It just keeps getting better all the time.

Feds Upset at NY Regulator

How did the NY Regulator get so many attorney/client communications to use as footnote references in the Order?