American regulator denies claim that it has an anti-British stance

 
Kasmira Jefford
Follow Kasmira
THE US regulatory body at the centre of allegations against Standard Chartered yesterday came out fighting against criticism that it had acted without consulting its fellow watchdogs, and denied that the case was proof of an anti-UK bias.

One of the New York’s state financial services department’s senior officials told City A.M. yesterday that the newly formed regulator “didn’t do things the standard old boy way” and said it was “not involved” in pursuing an anti-London agenda.

He spoke out after widespread criticism from British MPs and policymakers that claims against the bank were part of a campaign to undermine a rival financial centre.

The department of financial services (DFS), run by Benjamin Lowsky, stunned the City on Monday after it launched an explosive assault on Standard Chartered over $250bn in alleged money laundering transactions tied to Iran.

The order issued by the department scuppered long-running negotiations that were already taking place between the bank and various US regulators – including the Treasury and the Fed – to settle the claims over the transactions.

The official’s comments came as Standard Chartered chief executive Peter Sands spoke out for the first time since the allegations by the DFS had been made.

“We didn’t anticipate this happening at all”, he told City A.M. “It was quite surprising because we had been engaged in a process with five different US regulatory agencies, a process we initiated and we didn’t have any reason to believe that one of the agencies would act in this way”.

He admitted that some transactions did break US sanctions but these amounted to only 300 transactions worth $14m and were all “administrative or understandable mistakes”.

“We are sorry those mistakes occurred but they are in the context of 150m transactions and there were no payments identified that involved individually sanctioned entities by the US government at that time”.

Sands also confirmed that Standard Chartered’s executive director of risk mentioned in the report was Richard Meddings, now finance director, but denied that he had described US regulators as “f****** Americans.”

“As far as we can tell and none of the people at that meeting recall making that statement so we do not believe that that quote is correct”, he said.

Shares in Standard Chartered rebounded seven per cent yesterday, but are still down 18 per cent since the scandal broke. Sands conceded: “we have paid a price already in terms of reputational damage”.

Bank of England governor Mervyn King dismissed claims yesterday that US regulators were engaging in a war against UK banks but said that UK authorities would ask that US regulatory bodies “work together and refrain from making too many public statements until the investigation has been completed.”

Standard Chartered is believed to be considering legal action for reputational damage against the DFS, which on Monday accused the 160-year old bank of operating as a “rogue institution.”