Business, Economics and Jobs

Standard Chartered shares rally as CEO Peter Sands defends British bank


Shares in Standard Chartered rebounded today after the bank's chief executive, Peter Sands, rejected allegations of money laundering.


Matthew Lloyd

Standard Chartered chief executive Peter Sands came out swinging today, rejecting a New York regulator’s claims that the British bank helped Iran launder billions of dollars and challenging the accuracy of the highly damaging allegations.

Shares in Standard Chartered rallied 7.08 percent after Sands’ first public comments since the Department of Financial Services published a damning report late Monday accusing the bank of breaking US sanctions by handling $250 billion of transactions for Iran.

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Benjamin Lawsky, who runs the Department of Financial Services, has threatened to cancel Standard Chartered’s state banking license if it is found guilty.

Its shares fell 16 percent on Tuesday.

Sands admitted that the bank had violated US sanctions in some transfers, but he rejected Lawsky’s central accusation that the bank had conspired with Iran to hide the transactions to evade US sanctions, the Associated Press reported.

"There was no systematic attempt to circumvent sanctions," Sands said.

Standard Chartered is the third British bank to come under fire from US authorities in recent months — a trend outspoken London Mayor Boris Johnson said was starting to “shade into protectionism."

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“And you can’t help thinking it might actually be at least partly motivated by jealousy of London’s financial sector — a simple desire to knock a rival center,” Johnson wrote in a column in the London-based Spectator magazine that is due to be published tomorrow, Bloomberg reported.

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Bank of England Governor Mervyn King also entered the fray today, criticizing the New York regulator for failing to coordinate with its counterparts. 

"I think all the UK authorities would ask is that the various regulatory bodies that are investigating the particular case try to work together and refrain from making too many public statements until the investigation is completed," said King, according to Reuters.

King, meanwhile, was in the headlines for another story today.

The Bank of England downgraded its 2012 forecast for economic growth, signaling it may be willing to pump more stimulus into the economy, MarketWatch reported. The growth forecast was cut to zero from 0.8 percent forecast in May.







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