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Fed and Treasury Irate at NY Bank Regulator's Vulgar Display of Public Diligence with Standard Chartered

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Ed. Note: This week's Market Shadows newsletter is here. Allan Trends' updated charts are here


Fed and Treasury Irate at NY Bank Regulator's Vulgar Display of Public Diligence with Standard Chartered

Courtesy of Jesse's Cafe Americain 

Spitzer: If they shut me up, who'll take my place?

Lawsky: I will

The NY Banking regulators clearly do not understand the regulatory 'hands off' philosophy of Treasury and the Fed towards the pampered princes of finance and the privileged few.

This was supposed to have been privately settled amongst gentlemen with a gentle wristslap and a thorough coverup. 

And of course this exposes the Federal government and their financerati as utter hypocrites, especially when they are stoking the fires of conflict.

Only the little people are meant to suffer for their country. For the favored few, everything is just another law-bending, money making opportunity.

Some of the wording in this is priceless, especially considering the extent of what the Bank had done and with whom.

I won't be holding my breath for the US regulators to clean up their own manipulated markets and privileged insiders. It might muss someone's ruffled sleeves and Presidential cufflinks.

Liberty and justice -- for some.

Exclusive: Regulators irate at NY action against StanChart
By Carrick Mollenkamp and Emily Flitter and Karen Freifeld
August 8, 2012

NEW YORK/LONDON (Reuters) - The Treasury Department and Federal Reserve were blindsided and angered by New York's banking regulator's decision to launch an explosive attack on Standard Chartered Plc over $250 billion in alleged money laundering transactions tied to Iran, sources familiar with the situation said.

By going it alone through the order he issued on Monday, Benjamin Lawsky, head of the recently created New York State Department of Financial Services, also complicates talks between the Treasury and London-based Standard Chartered to settle claims over the transactions, several of the sources said.

Lawsky's stunning move, which included releasing embarrassing communications and details of the bank's alleged defiance of U.S. sanctions against Iran, is rewriting the playbook on how foreign banks settle cases involving the processing of shadowy funds tied to sanctioned countries.

In the past, such cases have usually been settled through negotiation - with public shaming kept to a minimum.

In his order, Lawsky said Standard Chartered's dealings exposed the U.S. banking system to terrorists, drug traffickers and corrupt states.

But the upset expressed by some federal officials, who were given virtually no notice of the New York move, may provide ammunition for Standard Chartered to portray the allegations as coming from a relatively new and over-zealous regulator...

Read the rest here.


Larry Doyle's take - Crime Pays, a lot.

Standard Chartered Scandal: Crime Pays

If in fact — and as reported — the UK-based Standard Chartered Bank is fined a token $700 million for the violation of American sanctions in dealing with Iran, then we are left with only one conclusion: CRIME PAYS. (A second conclusion would be that our regulators and government officials are in the pockets of the banks BUT we already knew that.)

There are allegedly $250 billion worth of transactions in question in this Standard Chartered scandal. A slap on the wrist of $700 million would equate to less than .3 of 1% (.003) for dealing with the crowd that would like to see Israel obliterated. 

Is this a joke? What do you think the profit margins were in the business transacted by Standard Chartered with their friends in Iran? Certainly a LOT more than than .003.

With new and explosive scandals becoming regular occurrences, the underside of the financial industry on both sides of the pond is being exposed like never before. How do the shareholders of Standard Chartered feel as the value of their holdings plummet?

Once again, we learn that the real risks in the marketplace go far beyond basic market risks. The greatest risk of all is getting overrun by a situation in which our financial regulators fail to perform. Chirantan Barua, an analyst at Sanford Bernstein, is quoted in the WSJ this morning and gets the award for the greatest understatement of our entire economic crisis,

“These scandals [don't] reflect well on the regulators who are becoming a global laughing stock.”

No doubt about that but the lives impacted and well beings destroyed are no laughing matter.

Navigate accordingly.

Related Sense on Cents Commentary:
Standard Chartered: Friends Like This, Who Needs Enemies 

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Thu, 08/09/2012 - 11:43 | 2691285 pros
pros's picture

link to original story in reuters which was "disappeared" (too hot to handle)


Thu, 08/09/2012 - 11:42 | 2691279 Father Lucifer
Father Lucifer's picture

dealing with the crowd that would like to see Israel obliterated.

So? Lots of the world would like to be done with Israel already.

See they were telling us the issue with Iran was nuclear weapons, which has been proven false over and over.

Thu, 08/09/2012 - 10:23 | 2690887 Miss America
Miss America's picture

The fine???   Who cares.  Millions used to mean something.  Now billions are no big deal.

It's the Charter!!!   That's all Standard cares about.  They'll pay any fine as long as they don't lose their NY banking charter!!!!!!!!!

The AML nailed Nomura or Diawa a few years back.  Lets see if London gets the same treatment.  If not, then some banks that got hit over the years have a right to make a stink.


Thu, 08/09/2012 - 09:43 | 2690747 saycheeeese
saycheeeese's picture

maybe... the world cannot simply afford a bank going bust... at this point of time  so in the interestest of the world's league...   the recomendation is:  Fine

Thu, 08/09/2012 - 09:25 | 2690652 williambanzai7
williambanzai7's picture

Don't forget Koch Industries, they apparently have a waiver to sell drilling equipment to the Iranians...so they can finance Moshe Romney.


Thu, 08/09/2012 - 08:35 | 2690473 falak pema
falak pema's picture

talk about crony capitalism and the Oligarchy's hold on the political machine : 

Washington Insiders Think Obama's Next Treasury Secretary Could Come From Private Equity Behemoth Blackstone - Business Insider

The Dems have nothing to blush about in their pandering to and fawning in front of the money men; all the while they bad talk Mitt Romney and his capitalist "rich man's son" past.

Thu, 08/09/2012 - 08:42 | 2690495 azzhatter
azzhatter's picture

As long as we have Geithner, Bernanke, Dimon et al, we are exposed to terrorists

Thu, 08/09/2012 - 08:28 | 2690451 Vidar
Vidar's picture

The sanctions on Iran are another example of US/Israeli imperialism and have no basis in legitimate law. If they prosecute someone for the actual fraud that goes on every day I might be interested. This is a bunch of socialist "oh great they got one of those capitalists" gloating that is irrelevant to the real problem.

Thu, 08/09/2012 - 07:43 | 2690371 Revert_Back_to_...
Revert_Back_to_1792_Act's picture

"Is there any reason why the American people should be taxed to guarantee the debts of banks, any more than they should be taxed to guarantee the debts of other institutions, including merchants, the industries, and the mills of the country?" Senator Carter Glass


Thu, 08/09/2012 - 06:13 | 2690286 dollarcoaster
dollarcoaster's picture


700 million. Who's going to pocket the ''big fine'', New York State or Washington?

Thu, 08/09/2012 - 08:44 | 2690505 covert
covert's picture

boo hoo, might have to do something right?


Thu, 08/09/2012 - 07:52 | 2690379 johnQpublic
johnQpublic's picture

well, i guess i can if nobody else will



i dont know where i'm going to put it, but i'm willing to deal with that later if i must

Thu, 08/09/2012 - 02:10 | 2690169 guiriduro
guiriduro's picture

"dealing with Iran" is a non-crime and the NY regulators have overreached.  There's plenty of real financial crime to be chasing, get on with that.

Thu, 08/09/2012 - 09:01 | 2690563 madcows
madcows's picture

Uh, laundering money for terrorists is not good, especially when the rest of the world is trying to impose economic sanctions against Iran so that they don't produce a nuke and use it on us.

So, Wall st. has crooks, so let's ignor Iran?  I don't get it.

Wed, 08/08/2012 - 23:14 | 2689931 Gamma735
Gamma735's picture

Bullish on the SEC.  What exchange is the SEC listed on?   The DKDC Exchange (Don't Know, Don't Care Exchange)?

Wed, 08/08/2012 - 22:46 | 2689847 working class dog
working class dog's picture

But Bernankster and tax cheater Timmah are such noble and good people, OHH I just threw up in my mouth!!

Wed, 08/08/2012 - 22:34 | 2689820 Ponzi_Scheme
Ponzi_Scheme's picture

We have learned any financial crime is permissible, except money laundering for the Israel haters (Iran) and stealing from Jews (Madoff).

Wed, 08/08/2012 - 23:19 | 2689944 Buck Johnson
Buck Johnson's picture

I bet Standard cut out a bunch of "special banks" in the US for the Iranian business and theyu went nuts over it.

Wed, 08/08/2012 - 22:14 | 2689761 jonjon831983
jonjon831983's picture

"for dealing with the crowd that would like to see Israel obliterated. "  is this confirmed, or what is a false translation of what the Iranian higher ups actually said.


The title for the reuters article changed since this morning to: "Standard Chartered begins fightback on Iran allegations"

Wed, 08/08/2012 - 22:07 | 2689729 shovelhead
shovelhead's picture

Why do I get the feeling that the next time we hear about Lawsky will be a story of how he is being sued for chasing down a fat kid drinking a 24 oz. Big Gulp.


Extra points for Hugh Laurie pics. The guy slays me.

Wed, 08/08/2012 - 20:40 | 2689497 russwinter
russwinter's picture

Federal regulators "probing for two years" pretty much says it all. Just one more get Out of Jail card was issued. 

Wed, 08/08/2012 - 20:30 | 2689481 TrustWho
TrustWho's picture

Thank you Benjamin Lawsky for shedding some light on the roaches. Fuck some civil settlement, file crimminal charges, PLEASE and send some overpaid corporate bankster to jail.

Wed, 08/08/2012 - 19:11 | 2689347 q99x2
q99x2's picture

Call the Netanyahu. Arrest them.

Thu, 08/09/2012 - 12:01 | 2691350 Nadaclue
Nadaclue's picture

Call the Netanyahu. Mossad them.


Wed, 08/08/2012 - 18:47 | 2689281 FinalCollapse
FinalCollapse's picture

Hang all banksters involved, rape their (better looking) wives and sell their children into slavery.

Wed, 08/08/2012 - 18:44 | 2689278 fourchan
fourchan's picture

akminajihad chuckles knowingly.

Wed, 08/08/2012 - 17:50 | 2689148 hardcleareye
hardcleareye's picture

Jesse's Cafe Americain and ZH are my two first sites I visit when I log on.

He has more to say on this matter...

"Casual corruption of the markets is now being accepted as a necessary system overhead, as a tax on the public to support the failed financial system, which is being kept alive to support a kleptocracy of politicians and the monied interests. It is sustained through fraud and force, but has little to do with the real economy anymore.

It is important to get this to understand what is going on."



Wed, 08/08/2012 - 18:33 | 2689255 Uncle Remus
Uncle Remus's picture

Jesse worships FDR a bit much for my taste and I am not sure I agree with his perception of "the center". Nonetheless, I read him regular.

Wed, 08/08/2012 - 18:17 | 2689215 NotApplicable
NotApplicable's picture

Too bad the author is just as clueless as the rest of the herd.

The greatest risk of all is getting overrun by a situation in which our financial regulators fail to perform.

Anybody who enganges in this fantasy deserves what they get. Sadly though, the destruction caused by their ignorance isn't limited to them, as it creates the cover required to pull off the crime in progress, affecting us all.

Nothing but childish, wishful-thinking.

Wed, 08/08/2012 - 17:37 | 2689120 Joebloinvestor
Joebloinvestor's picture

At least we have a press that can and will report this shit.

Other then that, John Q, go pound sand if you ain't connected.

Watch some floozy come forward about info on Lawsky.

Wed, 08/08/2012 - 20:03 | 2689050 booka
booka's picture


“These scandals [don't] reflect well on the regulators who are becoming a global laughing stock.”



Oh yes, another gaffe. 


p.s. Hi authors, admin and all users! I'm interested reader, with basic economy knowledge, and somewhat better European history and geo-political knowledge. Have enjoyed following this page for awhile. It gives some prospective on this whole mess and some laughs (equally important So thank you all! :)

Thu, 08/09/2012 - 10:09 | 2690879 DOT
DOT's picture

Welcome to ZH booka.

It just keeps getting better !

Wed, 08/08/2012 - 17:07 | 2689038 TulsaTime
TulsaTime's picture

AS IF this is news....recall a picture of one of the last admin high mucky-mucks doing the greedy dance with a certain 'bad man' enemy. 

Wed, 08/08/2012 - 17:06 | 2689030 TideFighter
TideFighter's picture

To Chuckie:

"We are sorry. We wrote the check to your campaign, but it was probably lost in the mail. Do

you accept cash and do you want a woman to deliver it? " 

Thu, 08/09/2012 - 09:42 | 2690741 Al Gorerhythm
Al Gorerhythm's picture


Used notes and a messenger boy will do just fine.


Wed, 08/08/2012 - 17:00 | 2689007 cogen11@cox.net
cogen11@cox.net's picture

Hypocrisy is the Vaseline of political corruption.  The regulators are the Vaseline

Wed, 08/08/2012 - 16:53 | 2688978 Metalredneck
Metalredneck's picture

Catch & release for whales, fillet & barbecue for small fry.  That's the SEC.

Thu, 08/09/2012 - 12:57 | 2691532 ebworthen
ebworthen's picture

Their nets are only big enough for minnows and sardines.

The "Orca" isn't big enough for a Great White, much less a whale.

Thu, 08/09/2012 - 10:26 | 2690971 uno
uno's picture

and by catch you mean watch trannie porn at work

Wed, 08/08/2012 - 17:03 | 2688958 Bicycle Repairman
Bicycle Repairman's picture

Memo to Mr Lawsky:

Please avoid the following:

-  Small airplanes

-  Hot tubs

-  Long walks alone in the woods

-  Armed security guards

-  Slow drives thru Dallas



Thu, 08/09/2012 - 00:37 | 2690085 Intoxicologist
Intoxicologist's picture

Riding in automobiles

Movie theatres

Temples in Wisconsin



Being in crowds

Being alone

Sheesh, this world is depressing me lately....

Wed, 08/08/2012 - 16:44 | 2688933 Jlmadyson
Jlmadyson's picture

Yea ain't this a bunch of corrupt BS.

More whistle blowing please.

Wed, 08/08/2012 - 16:50 | 2688863 Precious
Precious's picture

What's wrong with you people? 

Now give it BACK !

Thu, 08/09/2012 - 08:32 | 2690460 _underscore
_underscore's picture

Presumably the Fed & the other regulatory agencies were miffed because the SCB investigation was/is ongoing & the NY regulator jumped the gun somewhat - quite understandable, if, as implied, all parties, including SCB, were working in concert over the alleged transgressions & their legality or otherwise.

Another point is that these are current allegations are not tested or answered to (I believe SBC gets an opportunity on Augsit 16th), and meanwhile their SP has been severly impacted. Surely (even if they are evnetually shown to have trangressed) financially damaging allegations before due process is a bit unfair? Compare & contrast a person in a criminal investigation having an investigating agency state they were giulty before due process.

I believe SCB have disputed the $250B figure & say it relates to only about 0.0.1% of their Iranian transactions (or about £14M in total) - and even these it says it was seeking clarification on & co-operating with the regulatory bodies on.

I don't know if SCB are 'guilty' or not - but neither do any of the media commentators (or, I suspect, do the regulators yet without a full legal test/challenge) or posters here.

Don't suppose this logical approach will go down well, seems there's a hanging jury already been appointed.


Thu, 08/09/2012 - 13:20 | 2691588 illyia
illyia's picture


Wed, 08/08/2012 - 17:05 | 2689029 engineertheeconomy
engineertheeconomy's picture

It's fun to fight over Monopoly Money, and who gets to press the "print" button on the copy machine...

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