Standard Chartered processed payments for terror groups and Iran, lawsuit says

By Louis Goss

Two whistleblowers have said they have uncovered new evidence that British bank Standard Chartered facilitated billions worth of payments on behalf of sanctioned entities including Hamas, Al-Qaeda and the Iranian state, court filings show.

In a filing to a New York Court on Friday, the whistleblowers said they had discovered "hidden data" in excel spreadsheets that show Standard Chartered made more than $100 billion worth of foreign exchange transactions on behalf of "Iranian-related clients" between 2008 and 2013.

Standard Chartered also facilitated payments made by a "notorious Pakistani fertilizer company, which sold explosive materials to Al-Qaeda and the Taliban," and processed transactions for an "Iranian steel manufacturer that supplies the Iranian military," the lawsuit says.

The whistleblowers, who include the former head of Standard Chartered's transactions unit, filed the motion on Friday in a bid to reopen a long-running case against the FTSE-100 index bank which was previously dismissed in February.

Shares in Standard Chartered (UK:STAN), listed on the London Stock Exchange, fell 4% on Tuesday having gained 13% in the year-to-date.

Standard Chartered denied the allegations and said they are "confident the courts will reject these claims, as they have already done repeatedly".

"This filing is another attempt to use fabricated claims against the bank, following previous unsuccessful attempts," a Standard Chartered spokesperson told MarketWatch.

"The false allegations underpinning it have been thoroughly discredited by the U.S. authorities who undertook a comprehensive investigation into the claims and said they were 'meritless' and did not show any violations of US sanctions," the bank's spokesperson said.

Standard Chartered was previously fined $227 million by the U.S. Department of Justice in 2012 for facilitating transactions on behalf of sanctioned entities between 2001 and 2007 but avoided prosecution after British prime minister David Cameron intervened on its behalf.

In the motion on Friday, the two whistleblowers say new forensic data analysis shows Standard Chartered continued facilitating billions worth of transactions on behalf of Iran-linked entities after the bank said it had closed its Iranian operations in 2007.

The filing says the transactions were uncovered with the help of forensic investigator David Scantling, who worked with former Standard Chartered executive, Julian Knight, and currency trader Robert Marcellus to "decloak" hidden data in the excel spreadsheets that detailed Standard Chartered's transactions from 2012.

The whistleblowers are now alleging the U.S. government carried out a "colossal fraud" by concealing evidence of those transactions from the court after the FBI carried out an analysis of the data submitted to it by the two whistleblowers.

"Either the Government lied that it had conducted 'a lengthy, costly, and substantial investigation' into Brutus's claims only to find them 'meritless'... Or, the Government was fully aware of the decloaked transactions and simply lied to conceal them," the lawsuit says.

-Louis Goss

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06-04-24 1019ET

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