The fine is the latest scandal to hit Britain’s banking industry this year after Barclays Plc was fined a record 290 million pounds in June for manipulating the London interbank offered rate, the benchmark interest rate for $500 trillion of securities worldwide. Chief Executive Officer Robert Diamond, Chairman Marcus Agius and Chief Operating Officer Jerry Del Missier all stepped down following the fine.
Standard Chartered CEO Peter Sands will probably keep his job because the bank largely followed the rules, according to Leech.
“It’s become apparent the DFS rhetoric was quite emotive and the fact other regulators in the U.K. and U.S. have distanced themselves,” said Leech. “All that suggests the wrongdoing was to do with the letter of the law, but in the substance and spirit, Standard Chartered was 99.9 percent compliant.”
Jon Tracey, a spokesman for Standard Chartered, declined to comment.
The fine may be the largest paid to an individual regulator under a money laundering accord. In June, ING Bank NV agreed to pay $619 million to settle similar allegations. That sum was split evenly between the federal government and the Manhattan District Attorney.
Standard Chartered’s penalty is high when compared with the $160 million Wells Fargo & Co.’s Wachovia Bank unit paid in 2010 to resolve a criminal investigation of how drug cartels used the bank to launder money through Mexican exchange houses, said Chris Skinner, director of the Financial Services Club, and CEO of Balatro Ltd., a banking industry research firm in London. Wachovia admitted failing to monitor $420 billion in trades through exchange houses, known as casas de cambio.
“In the context of the two, I’d say they’ve been fined heavily,” he said.