Standard Chartered Chairman Retracts ‘Both Legal and Factual Incorrect Statements’ On Money Laundering Scandal

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By Lianna Brinded | March 21, 2013 8:37 PM EST

(Photo: Reuters)

Standard Chartered Chairman Sir John Peace has apologized for making 'both legally and factually incorrect' statements about the bank's admission to wilful criminal conduct when it came to breaking US sanctions laws by moving money through the US system for clients based in Iran.

In a statement on Standard Chartered's website, Peace said that he "made certain statements that I very much regret and that were at best, inaccurate," when he, and the group's CEO and finance director, spoke at a press conference at the beginning of the month.

Peace says that when asked by the press asked questions about individual employee conduct and compensation agreements, following the group's settlement with several US regulators over its role in money laundering for clients sanctioned under US law, he made a number of false statements, via phone, that he would like to now retract.

"In particular, I made the following statements in reference to a question regarding the reduction of bonuses for SCB executives [and said] 'We had no wilful act to avoid sanctions; you know, mistakes are made - clerical errors - and we talked about last year a number of transactions which clearly were clerical errors or mistakes that were made," he says.

"My statement that SCB "had no wilful act to avoid sanctions" was wrong, and directly contradicts SCB's acceptance of responsibility in the deferred prosecution agreement and accompanying factual statement. Standard Chartered, together with me, Peter Sands and Richard Meddings, who jointly hosted the press conference, retract the comment I made as both legally and factually incorrect," he adds.

The statement emphasised that Standard Chartered "unequivocally acknowledges and accepts responsibility, on behalf of the Bank and its employees, for past knowing and wilful criminal conduct in violating US economic sanctions laws and regulations, and related New York criminal laws, as set out in the deferred prosecution agreement.

Standard Chartered shares were little changed in early London trading, changing hands at 1,736 pence each, a 0.3 percent rise from Wednesday's close.

In August last year, Standard Chartered's shares plunged to their lowest level in four years when New York state authorities threatened to remove the bank's US licence, accusing it of "acting as a rogue institution" in its dealings with Iran.

Two weeks after this, Standard Chartered paid a civil penalty of $340m (€263m / £225m) to the New York State Department of Financial Services (DFS), in order to settle the regulator's charges that the UK-listed bank hid at least a quarter of a trillion US dollars' worth of transactions linked to Iran, which is subject to stringent US sanctions.

Then, in December, the bank paid a $100m fine to the Federal Reserve and $227m to the Department of Justice for the same reasons as the DFS.

Earlier this month, Standard Chartered announced it cut its bonus pool by 7 percent to pay for the raft of fines, after unveiling its full year 2012 results.

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