Bloomberg reports that the state’s top banking regulator, Benjamin Lawsky has power to act in his discretion against any financial institution he deems untrustworthy, according to the charter of his year-old department.
Penalties he could impose include fines and the revocation of the bank’s license to operate in the state. Lawsky is said to be considering a settlement figure as high as $700m, according to person familiar with the case. That would match the amount HSBC Holdings Plc set aside last month to resolve allegations of similar behavior.
Since the August 6th issuance of an order from Lawsky’s Department of Financial Services threatened to revoke Standard Chartered’s license, the bank has focused its defense on the amount it laundered, saying it involved less than one percent of the 60,000 Iranian wire transfers asserted by Lawsky.
Even if Standard Chartered’s position is legally sound, the order’s disclosure of internal e-mails suggesting a conspiracy to hide the identity of Iranian clients from regulators has given Lawsky grounds to act when the two sides face off at an administrative hearing Aug. 15, according to experts on both sides of the Atlantic.
'I don’t care whether it is a half of one percent that weren’t right', said Arthur Levitt, former chairman of the Securities and Exchange Commission, in an interview yesterday on Bloomberg Radio.
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