Standard Chartered Share Discussion Threads

[wsgrocksit] 12/8/2012 18:50

August 12, 2012 6:30 pm
Standard Chartered pushes for settlement

By Kara Scannell in New York and Sharlene Goff in London

Standard Chartered is pushing for a settlement to resolve allegations it violated US sanctions prohibiting dealings with Iranian entities ahead of a preliminary hearing on Wednesday with New York state banking regulators.
The UK bank will agree to comply with a request from New York's Department of Financial Services (DFS) to hire an external monitor to ensure it meets US compliance rules.

A full settlement, that would avert the risk of the UK bank losing its banking licence in New York, will depend on US regulators reaching a joint agreement on a fine, which they would then put to StanChart. The bank has not yet received details of a potential settlement offer, according to someone close to the bank.

Both sides are eager to hash out a deal and negotiations are ongoing, but people close to the bank acknowledge it would be a "challenge" given the gaping discrepancies between the allegations from DFS – that the bank breached sanctions on $250bn of Iranian transactions – and StanChart's own assessment of its liability – that just $14m of payments fell foul of the rules.

The DFS has been pushing for a settlement of at least $500m. StanChart proposed a settlement of $5m several months ago, but it was rebuffed by DFS, people familiar with the matter said.

Such a fine would be less than other banks have paid for similar issues. ING, the Dutch bank, was fined $619m for sanctions breaches earlier this year, while HSBC has set aside $700m to cover expected fines for money laundering failures – still a hefty penalty.

StanChart executives are nevertheless hopeful that a settlement in principle could be reached on the basis that any financial penalty would be thrashed out at a later date, according to someone close to the matter.
StanChart was working towards a settlement before DFS published its statement, although bank executives thought this was unlikely to materialise until at least the end of this year.

The Department of Justice had been weighing whether to bring a case at all against the bank, a person with knowledge of the matter said, because the conduct was less egregious than what investigators found at other banks. But the DFS could intervene because it need only decide whether the bank meets safety and soundness standards to have a banking licence and does not have to prove the merits of the allegations.

The move by DFS last Monday has raised more questions about the role it will have in future sanctions investigations under way by federal authorities. DFS, headed by Benjamin Lawsky, has an economic incentive to become more involved. Several years ago when the DoJ and the Manhattan district attorney's office began investigating the cases jointly, they agreed to split the settlement monies.

[wsgrocksit] 12/8/2012 14:57

Standard Chartered wants deal on Iran

Standard Chartered is to make it clear it wants to settle its battle with New York regulators over dollar trades with Iran rather than face a drawn-out battle.



In a hearing with the New York State Department of Financial Services (DFS) this week, Standard Chartered executives will say that they want a resolution of the issue that could entail the payment of a fine.
The British bank was accused last week of engaging in secret transactions with Iranian interests that it deliberately hid from the US regulators. The DFS claimed that the trades involved at least $250bn (£160bn) and led to Standard Chartered "reaping hundreds of millions of dollars in fees".
But Standard Chartered disputes the claims, saying the DFS document is inaccurate and misunderstands the law at the time of the trades.
But despite the robust response from Peter Sands, the chief executive of the bank, it is now clear that the bank would prefer to settle.
Standard Chartered has said there were only $14m of problematic trades which were administrative errors. Sources said that a "tariff" fine for mistakes of that type would be around $5m.

There were no systemic failures and there was no malfeasance, the bank will argue in New York.

[wsgrocksit] 12/8/2012 11:43

What about the fact that a very likely settlement is seeming to be the maximum of a $1bn fine and a future monitoring of the transactions, as it is seem to possibly be in line with HSBC's fine so possibly nearer $500m, surely that is more than priced in with the 6bn loss of value in their market value?

What would you expect the share price to do if the it was a fine and slap on the wrist?

Thanks


jacks13 12 Aug'12 - 10:57 - 1360 of 1361

I don't anticipate a rise.

Any leakage of significant news would obviously have an effect one way or the other but in the absence of that the price will, I think, drift downward until Wednesday's hearing is out of the way. There might even be a bit of a sell-off on Tuesday.

[skinny] 12/8/2012 11:02

From the above link.

Bank sources have told The Sunday Telegraph that after several settlements with other banks in relation to similar issues – most notably Lloyds' $350m settlement in 2009 over breaching US sanctions on Iran – Standard Chartered began a detailed review of all U-turn payments from 2001-2007.

The analysis was completed at the end of 2011, and Standard Chartered's counsel have been involved in discussing next steps – a global settlement – with five regulators, one of which was the DFS.

The process has also involved interviews of senior and other executives, believed to include Sands himself and Lord [Mervyn] Davies, who was chief executive at the time the transactions took place.

The analysis covered 150m separate transactions, and under the bank's analysis, it found "a little under 300", totalling $14m in value, which were invalid U-turn payments.

"That's clearly wrong, we're sorry those mistakes occurred," Sands admitted last week. But what he refutes is that, as Lawsky alleges, there was a systematic attempt to circumvent sanctions. "The immediate question you ask is how do you get to $250bn?" Sands continued. "It's a figure which we don't completely recognise, but it is of the order of the total amount of U-turn payment transactions processed by Standard Chartered New York in the period 2001 to 2007.

"To conclude they were all invalid or in breach is to conclude everything we did in the U-turn mechanism was wrong."

[jacks13] 12/8/2012 10:57

I don't anticipate a rise.

Any leakage of significant news would obviously have an effect one way or the other but in the absence of that the price will, I think, drift downward until Wednesday's hearing is out of the way. There might even be a bit of a sell-off on Tuesday.

[wsgrocksit] 12/8/2012 10:43

Anyone got a clue where the share price is going to be when opening on Monday morning?

[buywell2] 12/8/2012 09:06

"For almost 10 years, SCB [Standard Chartered] schemed with the government of Iran and hid from regulators roughly 60,000 secret transactions involving at least $250bn [£160bn] and reaping SCB hundreds of millions of dollars in fees," Mr Lawsky alleged.



This seems LOW

1% would have earned them $2.5 Billion

Why would STAN do something illegal for PEANUTS

[ppidkw] 11/8/2012 10:20

Standard Chartered Case Casts a Chill Over Banks

...
" Now, federal law enforcement officials have been fielding a flurry of worried calls from bank executives concerned that the rules have suddenly changed, according to former and current officials involved in the conversations.

Some banks, the officials said, are trying to anticipate how they will navigate the apparent shifting terrain between state and federal law. The worry, the authorities said, is that the state banking regulator could decide that past transactions, which were legal under federal law, violate a state law. According to the federal authorities, one question continues to emerge: Will New York State take issue with these transactions?

Mr. Lawsky's order against Standard Chartered cited several apparent violations of state laws, among them that the bank "failed to maintain or make available at its New York branch office true and accurate books, accounts and records" of transactions including "Iranian U-turn transactions." The order also claims that the bank falsified records "with the intent to deceive the superintendent and examiners, supervisors and lawyers of the department and representatives of other U.S. regulatory agencies."

With his move against Standard Chartered, Mr. Lawsky "has created utter turmoil," said a federal official who insisted on anonymity because the conversations with the bank executives were private."

[skinny] 11/8/2012 08:55

Interesting last 2 posts, a new one on me - "extra-territoriality".

[miata] 10/8/2012 16:32

China has been dragged into the trading-with-Iran fray after the US Treasury imposed sanctions against Bank of Kunlun, a subsidiary of China National Petroleum Corp. This unleashed a furious reaction from the Chinese foreign ministry, incensed at the extraterritorial application of US laws to Chinese entities.

The Chinese foreign ministry's reaction was explosive: "By invoking its domestic laws to impose sanctions against [Bank of Kunlun], the United States has seriously violated norms governing international relations and hurt China's interests. China hereby expresses its strong dissatisfaction and opposition and will make solemn representations with the US from both Beijing and Washington," spokesman Qin Gang said.

"China urges the US to immediately correct its wrong action, revoke its groundless sanctions against Bank of Kunlun and stop doing anything that will harm China's interests and China-US relations," he added.

Mondays Pivots R1 1360, PV 1340, S1 1307

[miata] 10/8/2012 16:17

10/08/12 15:12 1359.8 50,000 O 1336.5 1337.5 Buy

Note the premium to buy in size, worth a punt around 1320p. (1328 is S1).

[jacks13] 10/8/2012 14:06

excitable chap, that market ticker.

[jonno1] 10/8/2012 13:49

More on Standard Chartered from the Market Ticker

[fozzie] 10/8/2012 12:46

There may be some selling ahead of the weekend, some have made a quick buck on the rebound and will exit for a profit and some will be nervous about next Wednesday but its all short term noise and i would fully expect the share price to recover back to the 1500 area within weeks imo.

[miata] 10/8/2012 12:44

10 Aug Standard... STAN HSBC Overweight 1,345.50 1,363.00 1,660.00 1,550.00 Upgrades

[jacks13] 10/8/2012 12:34

Get me some while you're there.

[sanks] 10/8/2012 12:02

I'm gonna buy some at 5.77
Hope it helps

... .........

[jacks13] 10/8/2012 11:45

You have a point Miata but with the New York hearing scheduled for Wednesday there could be some further selling at the start of the week.

[miata] 10/8/2012 10:30

In Hong Kong, there was a sharp sell-off of HK:2888 in the final hour from HK$165 where it had spent most of the day down to HK$163.6. As there was no such sell-off in HK:0005 one can take it this was a risk-off move to avoid any breaking weekend news (similar to that often seen with BP during BP's Macondo debacle) rather than a reaction to the publication of weaker than expected data on Chinese exports. It should be matched by a similar risk-on move on Monday.

[philo124] 10/8/2012 09:22

ppidkw- thank goodness somebody else remembers Saddam making that threat of refusing to be paid in US dollars! I think that was a big deal. Iran are definately now on that course and look where it's got them so far.

[miata] 10/8/2012 09:18

"Probably sit around these levels", intraday it won't sit still.