Standard Chartered Scandal Exacerbates Tension between the UK and USVW Staff
It is becoming tedious to keep track of all the recent banking scandals. According to a new U.S. report, UK-based Standard Chartered PLC (LON:STAN) (LON:STAC) (PINK:SCBFF) is next in the line of banks gone rogue. The U.S. justice department is currently looking into allegations that the bank illegally helped Iranian clients skirt U.S. financial sanctions, hiding transactions worth $250billion. U.S. sanctions against Iran have been in place since 1979; they were tightened 2008, amid suspicion that Iran was using banks to finance its nuclear program and terrorist organizations.
On Monday, a New York regulator issued a 30-page report that reproduces conversations and emails between the bank’s staff, including the words “You f–ing Americans. Who are you to tell us, the rest of the world, that we’re not going to deal with Iranians.” They were reportedly uttered by a London-based executive, in an argument with his U.S. colleague.
Even though Standard Standard Chartered PLC (LON:STAN) (LON:STAC) (PINK:SCBFF) denies the accusations, the bank lost more than $12.5billion of its stock market value in its biggest one-day fall. Its share price was temporarily down as much as 25 percent.
The attacks are a severe blow to the bank’s reputation, which until now had been valued as the most solid of the London-listed banks. They also come as a blow to the reputation of the city of London, as one of the world’s leading financial centers. It was criticized in Washington following Barclays PLC (LON:BARC) (NYSE:BCS)’s LIBOR rigging, HSBC Holdings Plc (HKG:0005) (NYSE:HSBC) (LON:HSBA)’s money-laundering, and JPMorgan Chase & Co. (NYSE:JPM)’s multibillion-dollar trading losses. “It seems to be that every big trading disaster happens in London,” New York congresswoman Carolyn Maloney said, during congressional investigations into the JP Morgan fiasco in June.
While some European press commentators were quick to blame Standard Standard Chartered PLC (LON:STAN) (LON:STAC) (PINK:SCBFF) for making profits at the expense security and world peace, in the UK, the public shaming was interpreted by some as a U.S. plot aimed at undermining London as a banking center. In particular, John Mann, a member of parliament and outspoken critic of the blatant greed displayed by many London bankers, unexpectedly jumped to the bank’s defense. He argued that the publicity given to British banking problems was disproportionate. “I think it’s a concerted effort that’s been organized at the top of the U.S. government”, he told Reuters. “This is Washington trying to win a commercial battle to have trading from London shifted to New York.”