Standard Chartered Plc will soon begin sifting through a mountain of data for signs of possible money laundering or other criminal activity, as a result of faults in the software critical to its anti-money laundering compliance program, Reuters reported Tuesday.
The report, citing two sources with knowledge of the matter, said the outcome of this review could affect any penalties regulators impose on the bank for anti-money laundering lapses.
Because Standard Chartered clears about two million US dollar transactions each month, the process of poring through the data will be “a huge piece of work” that could take months, said one of the sources.
Holes in the British bank’s anti-money laundering net were uncovered by a monitor imposed by the New York Department of Financial Services (DFS) in 2012, Reuters reported previously. At that time, DFS and federal authorities took separate actions against Standard Chartered, fining the bank a combined US$667 million for violating US sanctions by hiding transactions linked to Iran.
As a result of the latest problem, Standard Chartered is again under scrutiny from the DFS, the bank disclosed when announcing its earnings last week. A penalty of more than US$100 million and an extension of the monitorship is possible beyond its anticipated end in early 2015, another source said.
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