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Standard Chartered bank struggles against scandal

A worker answers phone calls at a branch of Standard Chartered Bank April 23, 2007 in Beijing, China.

Jeff Horwich: Shares of the British bank Standard Chartered are tanking in London this morning -- down some 25 percent. New York financial regulators say the bank concealed billions of dollars of illegal transactions for Iranian customers.

From London, here's Christopher Werth.


Christopher Werth: The New York State Department of Financial Services says Standard Chartered allowed Iranian banks and companies to hide around 60,000 financial transactions totaling around $250 billion dollars. If true, such activity is illegal under U.S. sanctions against Iran.

The regulator says Standard Chartered failed to show any regard for “the national security consequences of its flagrantly deceptive actions.”

Jacob Frenkel: While sometimes you think language like that is hyperbole, when you read the 25 to 26 pages of allegations, you really see that it’s not.

Jacob Frenkel is with the law firm Shulman Rogers.

The allegations are just the latest controversy to engulf banks. William Cohan, a former managing director at JPMorgan Chase, spoke with the BBC from the U.S. He pointed out that both the LIBOR scandal and recent losses at JPMorgan originated in London.

William Cohan: And I don’t know what it is about London, but you know people in this country are sort of scratching their heads and wondering that a little bit.

If proved, Standard Chartered risks losing its banking license. The bank denies the accusations.

In London, I’m Christopher Werth for Marketplace.

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I wish I could believe that someone would stand up to these crooks operating in the guise of banks, but I've lost hope. They'll probably get their wrists slapped, pay a minuscule fine and go back to doing the same damn thing!
Maybe the hackers will get revenge for us. The downfall of Knight Capital last week showed how vulnerable they are to their software, so a competent hacker could bring any of these guys down in less than 10 minutes.

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