British Bank Value Plunges After Iran Money Laundering Accusations

Posted August 7th, 2012 at 10:30 am (UTC-5)
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The British bank Standard Chartered lost nearly a quarter of its value in trading Tuesday, a day after U.S. officials accused it of illegally laundering $250 billion in financial transactions with Iran during the past decade.

The Britain's fifth-biggest bank has operations spread throughout the world, but until now had been spared from a wave of recent disclosures about financial irregularities by British banks. But New York's top banking regulator alleged that Standard Chartered “operated as a rogue institution” from 2001 to 2010.

The regulator said the bank earned hundreds of millions of dollars in fees as it filtered money through its New York branch in about 60,000 transactions with Iranian financial institutions. He said the transactions exposed the U.S. banking system to terrorists, drug traffickers and rogue states. The U.S. Federal Bureau of Investigation is conducting a criminal probe.

Standard Chartered said it “strongly rejects” the U.S. allegations and will fight the effort to revoke its license to do business in New York, a key financial center. But its stock plummeted, and the value of the bank plunged at least $12 billion.

The U.S. government has sharply regulated financial transactions with Iran since 1979, when 52 Americans were held hostage by Tehran for 444 days, and stiffened the rules in recent years as the West has sought to curb Iran's nuclear development program.