Mess with U.S. laws and we will rough you up. That’s the tune regulators have been singing this year as they’ve aggressively gone after foreign banks that operate in the U.S. but skirt the nation’s laws. Now we’ll get to see how punitive the damages are when it comes to what may be a second offender.
The U.S. Justice Department and two other regulators have announced that they’re reopening their investigations into Standard Chartered and its dealings with sanctioned countries. Specifically, they are looking into whether the U.K. bank hid transactions that breached U.S. sanction laws while simultaneously settling allegations that it breached U.S. sanction laws.
Standard Chartered agreed to pay $667 million back in 2012 and signed a deferred prosecution agreement for its dealings. Now, investigators are eyeing whether they told the whole truth or just the abridged version.
Analysts told the Financial Times that, if found culpable of hiding other transactions, Standard Chartered could see a much bigger fine and be pressured to say goodbye to some senior executives, like what the government did to BNP when it pushed the bank to part ways with more than two dozen employees, including its chief operating officer. And that was for a first offense.
Standard Chartered could also be banned from clearing U.S. dollar transactions, which is a real pain for bankers in the states. The same thing happened to BNP, and they reportedly had to reach out and ask other banks to do their clearing for them. It can be costly and annoying to clients.
The news comes just days after the Standard Chartered reported a 16% decline in third quarter profit, forcing the bank to issue its second warning in five months. Standard Chartered then announced that it would look to make an additional $400 million in cost reductions in 2015, so it may have to make cuts anyway. Needless to say, it was a rough week for the British bank. It’s stock got crushed, too.
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Big Year For Raymond James (Reuters)
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Buzz Around the Office
Ebola Jokes (Gawker)
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Quote of the Day: “They have flaunted the will of the shareholders… It’s like the board poking their finger in the eye of investors,” pension funds on Bank of America’s decision to appoint CEO Brian Moynihan chairman