4. Standard Skates By
(Originally published August 17, 2012)
Wow Standard Chartered. What a difference a week and $340 million makes.
Barely a week after the behemoth British bank got busted by New York Financial Services Superintendent Benjamin Lawsky for allegedly doing $250 billion worth of illegal business with Iran, Standard Chartered settled the affair Tuesday by paying a fine and agreeing to install a monitor to prevent future money-laundering. The announcement came just in time for the London-based bank, as it was scheduled to defend itself against the allegations at a hearing the following day.
Um, excuse us for asking, but if Standard Chartered was indeed a "rogue institution" and broke U.S. sanctions laws, then why not hold the hearings first and then decide the penalty? Those are some pretty nasty charges, so let's hear Chief Executive Peter Sands give some specifics under oath instead of flat-out denials to the press.
From the smell of it, the Brits got their knickers in a twist and New York's Lawsky, probably feeling the heat from the U.S. Department of Justice, twisted Sands' arm for a settlement before the facts could come to light and seriously embarrass somebody -- including himself.
In other words, he pulled a Spitzer, except in this case Lawsky did it to save America's "special relationship" with Great Britain instead of Wall Street campaign contributions for a future political run. (By the way Ben, disgraced former New York Governor Eliot Spitzer is not the act you want to follow if you want to get ahead in the politics business. Don't just take it from us. Ask around.)
Anyway, the $340 million penalty may seem hefty, but Standard Chartered earned $17.6 billion in 2011, so it's the equivalent of a speeding ticket to these guys. And as we all know, the best way to stop somebody from speeding is to take away their license.
And on that note, all that talk about revoking Standard Charter's license to do business in New York was merely that. Once the Limeys started whining that U.S. regulators were treating their banks differently than American ones, Lawsky claimed victory and left the game he started.
To which we say, congratulations to our friends across the pond. With that wrist slap of a punishment, Standard Chartered is being treated exactly like its counterparts in America. So quit your complaining, mates.