In case you missed it, a major news story yesterday is the bombshell that Lawsky dropped on the British bank, Standard Chartered, in the form of an order (a regulatory determination) that set out in considerable detail how the bank, with deep involvement of senior in house counsel and compliance staff, had doctored (“repaired”) wire transfers so as to disguise the fact that the customers were major Iranian banks, including its central bank. Both SCB’s outside US counsel (in 2003) and the head of the US operations (in 2006) raised big red flags that the way the banks was operating was out of line with the regs. The US chief was begging to exit the Iran business. From the order:
Firstly,” he wrote, “we believe [the Iranian business] needs urgent reviewing at the Group level to evaluate if its returns and strategic benefits are . . . still commensurate with the potential to cause very serious or even catastrophic reputational damage to the Group.” His plea to the home office continued: “[s]econdly, there is equally importantly potential of risk of subjecting management in US and London (e.g. you and I) and elsewhere to personal reputational damages and/or serious criminal liability.
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