A New York state case against Standard Chartered Plc is more about whether the British bank carried out an old-fashioned cover-up using allegedly false records and less about the role the bank played in the alleged money-laundering of funds tied to Iran, according to sources.
The New York Department of Financial Services on Monday ordered the bank to send representatives to a meeting next Wednesday to explain why its alleged breaches of records laws should not mean the loss of its state banking licence. A source said on Thursday that it was possible the meeting will be postponed to allow time for case discussions between regulators — state and federal — and the bank.
By using the run-of-the-mill laws, the New York regulator has been able to put more immediate pressure on Standard Chartered and given backbone to its threat to revoke the London-based bank’s New York licence. There are fewer gray areas in a records case than there would be in a case of more complex federal laws that have restricted transactions with nations like Iran.