After all that fighting talk, Peter Sands folded. He could have saved all the trouble by looking at how Bob Diamond’s tactics panned out.
2 July 2012, FT: Barclays chief threatens to hit back
3 July 2012, FT: Politicians welcome Bob Diamond’s departure
The statement from the DFS regarding the settlement underscores how meekly Standard Chartered surrendered after all that bluster about “we strongly reject both the position and the facts”.
First, it agreed that the conduct at issue involved transactions of at least $250bn. So much for the “over 99.9% were valid U-turn transactions” and only $14m were non-compliant.
Second, the DFS statement mentions that Standard Chartered will pay a “civil penalty”. This indicates that it may not be the standard case where banks conveniently neither admit nor deny wrongdoing. The installation of a monitoring team for two years and agreement to create a team to oversee and audit money laundering due-diligence suggests that the 'no admittance, no denial' clause will be absent from the final statement of the settlement. (On a side note, Tea Partiers and Republicans should note the job creation by government regulator Lawsky)
Third, this is a settlement with the DFS only. Federal agencies are free to pursue the matter and reach separate settlements. In fact the FT mentions that the US Treasury, the Department of Justice, the Federal Reserve and the FBI are probing transactions with
Iran. Now the big question is
whether $340m anchors their settlement expectations upwards (Standard Chartered
had offered a paltry $5m to DFS to settle the matter initially). In addition,
DFS and Lawsky have emerged as clear winners willing to take on “evil” banks.
Does that force the Feds to up the settlement amount in order to not be seen as
weak and conciliatory towards banks?