Standard Chartered Plc is close to agreeing to pay as much as $300 million to resolve claims by New York’s banking regulator that it didn’t flag suspicious transactions after promising to do so in a 2012 accord, a person with knowledge of the matter said.
A settlement between the London-based bank and Benjamin Lawsky, superintendent of New York’s Department of Financial Services, could come as soon as this week, the person said, asking not to be identified because the talks are confidential.
Standard Chartered said this month that it expects to be fined by the New York regulator and to face “remedial actions” over lapses in its anti-money-laundering controls. The bank said the problem was spotted by the independent monitor Lawsky installed as part of a $667 million accord the London-based firm reached with U.S. authorities over claims it violated U.S. sanctions laws in relation to Iran.
“It’s a shade worse than was previously rumored,” said Ian Gordon, an analyst at Investec Ltd. in London with a buy rating on the stock. “In the greater scheme of things, if it’s $100 million or $300 million, or somewhere in between, it’s not overly material.”
The stock was up 0.6 percent to 1,221 pence at 10:37 a.m. in London trading today, giving the bank a market value of about 30 billion pounds ($50 billion). The shares are still down 10 percent this year, the second-worst performance among Britain’s five biggest lenders after Barclays Plc.
Lawsky’s office secured $340 million in August 2012 in a deal reached the day before the bank was due to defend itself to the regulator. The rest went to authorities including the Federal Reserve, the Manhattan District Attorney and the U.S. Department of Justice in a deal concluded in December of that year.
Earlier this year, the monitor, Ellen Zimiles of Navigant Consulting Inc., identified lapses in the bank’s compliance related to a software program that was not flagging transactions from risky parts of the world for further review.
Zimiles’s contract is expected to be renewed for two years as part of the new settlement, the person said. Standard Chartered said in an Aug. 6 statement that it anticipated the monitor’s term to be extended as part of any deal.
Caitlin Ferrell, a spokeswoman for Lawsky’s office, and Standard Chartered’s Julie Gibson declined to comment.
Details about the settlement amount and the timing were reported yesterday by the Financial Times.