Published August 13, 2012 | By admin@mccarthylaw.ca
Standard Chartered Bank seems to have realized that tone is vital if one wants to settle a huge regulatory crisis. SCB is said to have agreed to a compliance monitor to ensure that the transactions conducted by the bank are compliant with U.S. anti-money laundering laws. Although this compliance monitor has yet to be named (and will not be Deloitte’s as they are implicated in the Order issued by the New York Banking regulator), it goes a long way to indicating to the marketplace that SCB is taking this matter seriously. (see today’s Report on Business p. 3)
Another indicator are the anonymous leaks about the cooperative tone that SCB is taking to settle matters in advance of the first appearance before the New York regulator scheduled for this Wednesday. (http://ca.reuters.com/article/businessNews/idCABRE87C04O20120813 ) Those leaks are indicating what the potential fine might be. The amount being bandied about is a staggering payment of up to $1 Billion USD. Undoubtedly the fall in the stock price has sharpened the focus of the CEO and the board at SCB.
Politicians are wading in on both sides of the Atlantic, including the Bank of England governor (http://www.theglobeandmail.com/report-on-business/international-business/european-business/bank-of-england-governor-questions-us-approach-to-stanchart-probe/article4469935/) . While their pressure and input will be a factor in any settlement, it is the potential of SCB losing its New York license which will be the driving force in the settlement. SCB’s President and CEO may still be emphatic in rejecting the claims of money-laundering but his legal team has likely been instructed to make this whole matter go away as quickly as possible. A resolution before Wednesday and the beginning of hearings would be exceptionally good news for SCB but can they possibly settle it in the way often done in the U.S. without admission of liability?