You know, children, this kind of thing just isn’t done:
In making his solo claims that the bank [Standard Charter] covered up $250 billion in transactions involving Iran, Mr. Lawsky has been likened to Eliot Spitzer, who drew high praise and harsh criticism as New York’s top prosecutor for his aggressive tactics on Wall Street and tendency to muscle federal authorities aside.
…
Just like Mr. Spitzer, Mr. Lawsky has rankled federal authorities in Washington who say that the state banking regulator is encroaching on their territory and even overstating his case. Mr. Lawsky, a 42-year-old who was born on a naval base in San Diego, has started an international firestorm, with some politicians in London, Standard Chartered’s home, denouncing his actions as those of a upstart regulator bent on damaging British banks.
Some officials investigating the bank view Mr. Lawsky’s action as the product of political ambition, suspecting that he is already considering a run for governor himself one day. As an indication, they and others cite the tone of Mr. Lawsky’s order against the bank where he called it a “rogue,” claimed it had “zeal to make hundreds of millions of dollars at almost any cost” and was engaged in “dealings that indisputably helped sustain a global threat to peace and stability.”
Of course such a tone of disdain and insult should never be applied to institutions that, after all, serve as the carapace for our betters:
Standard Chartered has said it “strongly rejects the position and portrayal of facts” by Mr. Lawsky’s department.
That was last week.
New York’s top banking regulator reached a settlement on Tuesday with Standard Chartered over charges that the British bank laundered hundreds of billions of dollars in tainted money with Iran and deliberately lied to regulators.
The bank agreed to pay $340 million to the Department of Financial Services, which is led by Benjamin M. Lawsky. “The parties have agreed that the conduct at issue involved transactions of at least $250 billion,” Mr. Lawsky said in a statement.
Oh, and just in case anyone wants to try on the “this does not reflect the values/behavior of the institution as a whole” line, suck on this:
Beyond the dealings with Iran, the banking regulator said it had discovered evidence that Standard Chartered operated “similar schemes” to do business with other countries under United States sanctions, including Myanmar (formerly Burma), Libya and Sudan.
The “apparent fraudulent and deceptive conduct” by Standard Chartered happened from 2001 to 2010, the order said, and was particularly “egregious,” because some of the transactions were being processed even as the bank was under formal oversight by New York banking regulators from 2004 to 2007.
You know…it’s true. Being loud and blunt and accurate in one’s description of criminal and/or evil behavior may indeed be bad manners in certain circles. Which is just about all you need to know about such folks.
Also too: as Romney/Ryan will tell you, all we need to do to unleash a job creating tsunami led by MOTU is to crush the jackbooted regulators of the hostile state. Then no bank will provide aid and comfort to the worst people on earth. Not ever. They promise.
Image: El Greco, Christ Driving The Money Changers From The Temple, c. 1570-1576.
The Fat Kate Middleton
You are on a tear today, Tom – it’s kind of glorious.
quannlace
Looks Biden is trying to make Little Romney cry:
At a campaign stop, Biden said: ” Romney Will “Put Y’all Back in Chains”
dedc79
The question with these types of settlements – was the penalty big enough to discourage this bank (or another bank) from doing it all over again? $340 million is a ton of money but how does it compare to how much they made from this laundering operation?
Lurking Canadian
I hope this guy Lawsky stays far, far away from hookers.
Villago Delenda Est
You know, back in the 17th century, there was no pussy footing around with maggots like those at Standard Chartered.
They were hanged from yardarms back then.
bcinaz
I keep thinking there must be something clever to say about Israel, nukes, neocons, and Free Markets! Just don’t know what.
BGinCHI
Dude’s fucking name is Lawsky. Didn’t the banking genius’s see the giant L on his superhero outfit?
eldorado
i don’t see anything in the article about jail time
smintheus
“Rankle”, meaning “fester”, is an intransitive verb. The expression is “rankle in the mind(s) of…”
MikeJ
@dedc79:
from the story:
OK, the bank didn’t make a quarter trillion, that’s how much they shuffled around. Let’s assume the bank made somewhere between 1% and 10%. If that assumption is true, they made somewhere between $2.5 billion and $25 billion.
Now that doesn’t mean that getting the settlement wasn’t the best thing to do. If they can keep an eye on them and prevent it form happening again, it’s a lot easier to take the fine and not have to go to court. Going to court would take at least five years, and nobody is ever going to jail (especially with them not being citizens).
MikeJ
@smintheus: It is either transitive or intransitive.
smintheus
@MikeJ: Odd that, as backers of terrorist-sponsoring states, they weren’t shipped off to Gitmo.
AnotherBruce
That Jesus guy must have been some kind of communist, driving the job creators out of the temple like that.
Villago Delenda Est
I used a bad word. I’m in moderation upthread. Someone help!
smintheus
@MikeJ: Nah, it’s an intransitive verb…pretty much everywhere except in the US, where people have misunderstood the expression I quoted and mistakenly assumed the word meant “irritated”.
Svensker
Why the hell can’t a British bank deal with Iran? What has Iran done that is so heinous? I know they’re fooking mooslems but, other than that, what’s their big sin?
Warren Terra
Let’s assume these really were illegal transactions. Anyone want to defend the proposition that the bank’s going rate for mediating illegal transactions was 0.1%?
I didn’t think so. Heck, I’d not be shocked if they charged 0.1% for legal transactions. For possibly worthless comparison – sorry, I’m not all that clued in to actual criminal conspiracies – when money laundering schemes appear in popular fiction (Breaking Bad, say, or Scarface), the launderer typically takes a significant double-digit percentage of the money.
Calouste
@Svensker:
They can deal with Iran. They just stand to lose their license to operate in the US if they do so. Apparently that license is worth at least $340 million to them.
Villago Delenda Est
@Svensker:
They imagine they can have their own nukes and defy the United States the way the North Koreans have.
Also, they provide an external existential threat to the Likudniks to keep them in power.
MikeJ
@Svensker: They were bringing the money into the US in violation of US law. Had they taken the Iranian money into England it wouldn’t be an issue in the US.
Tehanu
Why does this make me think about Ambassador Trentino insulting Rufus T. Firefly? Oh, I know: “upstart!”
Kristine
Quiet rooms, quiet rooms. Matters like these should be settled in quiet rooms, over a $300 bottle of wine or two, without fuss.
Yutsano
Waitaminute…does New York state law also have a prohibition against funding coming from Iran? I thought that was a federal law.
JGabriel
I actually have a smidgen of sympathy for the Feds on this one. Not a lot, mind you. The outcome clearly indicates that Lawsky was right, although he probably should have gotten a much bigger settlement — $340M on a $250B transaction is less than 2/10s of a percent.
That said, even when the state prosecutor is right, actions like this put the federal government on the line to dipomatically defend (or not) state actions — over which they have no control — to foreign governments.
Like I said, I think Lawsky was right here. But the federal government’s initial dismay wasn’t entirely unfounded. It’s a bitch for them when states go rogue with actions that may have international consequences.
.
JGabriel
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MikeJ:
Right, but to my mind, $340M on a transaction that large can be written off as a cost of doing business. It’s not a large enough penalty to deter future deals of a similar type.
Personally, I think the settlement should have been for a few billion.
.
MikeJ
@Yutsano: The statement references “apparent fraudulent and deceptive conduct”. There are all sorts of state laws they could violate in the course of violating federal law. Reporting false information about where the money came from probably violates NY law, even if NY doesn’t have a law about Iran.
Rafer Janders
With dirty money
Don’t be too rash,
Use Standard Chartered:
We launder cash
Burma Slave
kb
“The outcome clearly indicates that Lawsky was right”
Maybe, maybe not. Lawsky was due to have a hearing tomorrow where he could have pulled Standard’s NY banking license which would have cost them more than the fine.
Sometimes if you’re being shakendown , it’s easier and cheaper just to pay people off.
JGabriel
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@kb: Fair enough. I withdraw “clearly” and leave it at: The outcome indicates Lawsky was right.
But doesn’t prove it.
.
scav
Speaking from a purely tangential and selfish perspective, it’s also fun to admire the brain-freeze this could produce in certain quarters. Support the banks, the Job-Creators! But, that means siding with the Feds (!) and the banks were trading with Iran (boo hiss!). Support States Rights! But, it’s a New England state and they’re being mean to Bankers and the Rich. I keep expecting to hear a clicking and whirring sound. I’ll also take the side-benefit of linking Bankers to Amoral Iran-trading Illegal Scum in this election. Complicates the whole “It’s all about the Economy” narrative.
Alphonse de la Guerre Victorieuse Pour La Liberte et La France
Here’s the bank’s chief a few days ago, whining about not being able to bring in regulators over whom he has long-standing control:
James E. Powell
The thing I hate about settlements like this is that the public never learns what happened, who did what, why it was wrong, etc. The wrong-doers pay from the big pile of Other People’s Money that they have temporarily got their hands on. No one goes to prison, no one loses his bonus, no one loses his opportunity to do it again.
Gene in Princeton
I’ll be impressed when he goes after Goldman (ripping off customers), BoA (ripping off customers), HSBC (laundering drug money), Citi (laundering drug money), or any others of their ilk. Standard was a political target, so my guess is that he’s interested in a political career.
Nutella
Pocket change. They should be forced to disgorge every penny of gross profit made on those deals, plus interest, plus penalties, plus all the senior management fired for cause.
But no. White collar criminals always get to pay a little fine and then continue doing what they were doing.
Can you imagine a guy who robs a bank by taking $5000 from a teller getting to pay a fine of $5 and then go home? Somehow I’m sure that guy has to pay back ALL of the money AND go to jail.
It’s good to be a bankster.
Alberto
@Villago Delenda Est:
there was also slavery back then you twat
RobinDC
@MikeJ:
This settlement is trash, part of a culture which has legalized white collar crime and made it a cost of doing business. Lawsky joins the ranks of other ineffectual financial prosecutors who should hang their heads in shame and commit hari kari today which this garbage. Revoking Standard’s charter would have been an actual ballsy move, this was crap.