Innocent until, etc.

Last night I went out for dinner with some well-read friends (fish finger sandwich followed by mini doughnuts and chocolate dipping sauce, thank you for asking), and money laundering was the topic du jour.  And I quote: “Your lot are having a hard time, aren’t they – Coutts, then HSBC and now Standard Chartered”.  And indeed “my lot” are having a hard time, as I mentioned here only a couple of days ago.  But I felt particularly aggrieved on behalf of Standard Chartered because, as I read it, nothing has yet been found against them.  And surely, until then, we shouldn’t even be reading about this in the press.

I may have a naive view of the situation, but as I understand it Standard Chartered has been been visited by the New York State Department of Financial Services (DFS) – an organisation formed in October 2011 by transferring certain key functions of the New York State Banking Department and the New York State Insurance Department, and adopting the mission “to reform the regulation of financial services in New York to keep pace with the rapid and dynamic evolution of these industries, to guard against financial crises and to protect consumers and markets from fraud”.  Now colour me cynical, and certainly discount me from any future job with the DFS, but might not such a newly-fledged organisation be looking for a high-profile scalp?

As you all know, I am the very first to call for scalps, nay, entire heads on pikes once money laundering (or a gross failure in AML) has been proved.  But for now Standard Chartered denies the lot in their response to the DFS comments: “The Group strongly rejects the position or the portrayal of facts as set out in the order issued by the DFS… The Group does not believe the order issued by the DFS presents a full and accurate picture of the facts.”  There will be a hearing next week, and – if the charges are proven – Standard Chartered will be penalised and may well lose their New York banking licence.  But until then, we should emulate the credit rating agency Fitch, who announced yesterday that although downgrading of the bank’s rating is a possibility, it is still “too early” to judge and there needs to be “more clarity”.  Indeed.  If someone’s reputation can be trashed so publicly on a mere accusation, then we are all in trouble.

This entry was posted in AML, Money laundering, Regulation and tagged , , , , , , , . Bookmark the permalink.

One Response to Innocent until, etc.

  1. Robert says:

    What happens after their allegations are found to be exaggerated? Poor SCB will be the loser and now they are accusing Deloitte of aiding SCB, but they have also rejected the allegations?
    Even the “The governor of the Bank of England on Wednesday criticized a New York state agency for accusing Standard Chartered bank of money laundering before other regulators had completed their own investigations” http://tiny.cc/raptiw

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