Standard Chartered Fined $300 Million for Failing to Fix Money Laundering Problems

Standard Chartered Bank, the British multinational banking giant has been slapped with a $300 million fine by the New York Department of Financial Services (DFS) as the bank failed to fix transactions that could lead to potential money laundering problems.

The DFS announced that Standard Chartered failed to comply with certain regulatory requirements corresponding to a 2012 settlement when the bank paid $667 million to resolve a case that found it guilty of dealing with countries like Iran, which have been blacklisted by the United States.

At that time, the bank was warned of conducting any financial dealings with the banned countries and was asked to weed out any remaining transactions that were considered illegal.

In a latest investigation, the DFS sniffed out faulty flag wire transfers on the bank's computers systems that led to or came from restricted trade areas. According to The Guardian, one of the bankers of the financial institution deliberately dismissed all or any warnings of the illegal trade when a colleague pointed it out.

"You f*****g Americans. Who are you to tell us, the rest of the world, that we're not going to deal with Iranians,"

"If a bank fails to live up to its commitments, there should be consequences. That is particularly true in an area as serious as anti-money-laundering compliance, which is vital to helping prevent terrorism and vile human rights abuses," Benjamin Lawsky, superintendent of DFS, said at a press meet, according to CNBC.

The fine, imposed Tuesday, also requires Standard Chartered to fix the problems in the next 30 days and appointed an additional two-year independent compliance monitor. The DFS also suspended the bank's dollar clearing business for high-risk retail clients in Hong Kong and UAE.

In its defense, Standard Chartered said that it failed to detect these shortcomings due to "a lack of adequate testing both before and after implementation of the transaction monitoring system, and failed to adequately audit the transaction monitoring system."

It added that it "accepts responsibility for and regrets the deficiencies in the anti-money laundering transaction surveillance system at its New York branch. The group has already begun extensive remediation efforts and is committed to completing these with utmost urgency."