More On Legal & Compliancefrom The Advisor's Professional Library
- Where Are We Headed? The ultimate compliance goal is to help ensure that everyone associated with an advisory firm acts ethically at all times. Advisors and RIAs should do the right thing, even when regulators are not looking over their shoulders.
- Do’s and Don’ts of Advisory Contracts In preparation for a compliance exam, securities regulators typically will ask to see copies of an RIAs advisory agreements. An RIA must be able to produce requested contracts and the contracts must comply with applicable SEC or state rules.
Peter Sands, the CEO of Standard Chartered, is in New York and is prepared to attend a hearing ordered by Benjamin Lawsky, head of the state’s Department of Financial Services (DFS), on whether the bank should lose its charter to operate there based on charges that it flouted anti-money-laundering regulations. While the bank said he came to work with company lawyers, not to attend the hearing, it added that he will do so “if appropriate.”
Bloomberg reported Tuesday that Sands, who has disputed the amount of transactions cited by Lawsky as violating regulations, was reported by the Telegraph to have come specifically to answer charges and negotiate a settlement. However, New York-based bank spokeswoman Julie Gibson said in the report that Sands has been in the state for “a couple days,” and added, “If there is a hearing on Wednesday, he will participate in that.”
Melissa Cheah, a Singapore-based spokeswoman for the bank, was quoted saying, “He hasn’t gone personally to negotiate with regulators or specifically to attend the meeting. He is willing to do so if appropriate.”
The order for the hearing alleged that StanChart, as it is popularly known, helped to launder about $250 billion in Iranian funds over the course of 60,000 wire transfers that were set up not to disclose the presence of Iranian institutions in the process. The bank claims the amount is far smaller, less than $14 million.
Moody’s Investors Service said Monday that just the reputational damage from the DFS charges is credit negative.
Lawsky, as the top banking regulator in the state, is empowered to pull the bank’s license to operate in New York, based on his department’s charter. That could cost the bank 40% of its earnings, according to Chirantan Barua, an analyst at Sanford Bernstein Research in London.
The bank has already agreed to hire an outside monitor that will supervise the bank’s compliance with anti-money-laundering laws, and Lawsky is reportedly considering a settlement amounting to as much as $700 million. Last month HSBC Holdings put that much aside against a settlement on similar allegations.