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The British bank sees its sharpest one-day decline since 1988 after allegations of money laundering from the US.
The drop represented almost 24 percent of the bank's stock value, The New York Times said. According to Bloomberg data, "it was the sharpest one-day decline in the bank’s shares since at least 1988," the Times wrote.
Standard Chartered “strongly rejects” accusations by the New York State Department of Financial Services that the bank made the US financial system vulnerable to "terrorists, weapons dealers, drug kingpins and corrupt regimes," as quoted by the Times. The state regulator in the US has accused the bank of conducting $250 billion of transactions over seven years that violated US laws, according to Bloomberg.
The department probe has also brought allegations of "deficient money laundering controls" in outsourcing oversight jobs to India, The Times of India reported.
Standard Chartered denied any dealings linked to terrorists and said that it has not engaged in new business with Iranian customers for the past five years, The New York Times reported.
Nonetheless, Standard Chartered has now joined the ranks of several other beleaguered British banks. HSBC apologized last month after a US Senate investigation found executives at HSBC "ignored warnings for years" that the bank’s overseas operations were being used launder money and possibly finance terrorism, according to the Wall Street Journal. Barclays, meanwhile, forked over hundreds of millions of dollars to the UK and the US after admitting to misconduct in June for attempting to manipulate the LIBOR rate.
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The New York Times also pointed to the issue of how far US sanctions are now reaching, linking to a May 2012 Law360 report that described increased US sanctions against Iran and Syria as "measures [that] serve to demonstrate the expanding extraterritorial reach of U.S. sanctions...even for activities without any connection to U.S. commerce and that otherwise would be lawful in the home jurisdictions of such third-country nationals."
Reuters reported yesterday that a Standard Chartered official in London had been warned by a North American coworker that dealing with Iran could cause "catastrophic reputational damage." The London official reportedly answered:
"You f---ing Americans. Who are you to tell us, the rest of the world, that we're not going to deal with Iranians."