Recent documents submitted to a U.S. federal court allege that major British bank Standard Chartered helped finance sanctioned Iranian entities and terrorist groups. The claims were made by former Standard Chartered Bank (SCB) employee turned whistleblower Julian Knight. Knight alleges that U.S. officials lied by denying that he provided them with evidence of far greater wrongdoing by the bank. He has now asked a U.S. federal court in New York to reinstate the case.
London-based Standard Chartered has denied running transactions for any organizations designated as terrorists. The bank, which primarily serves clients in emerging markets, was previously punished with more than a combined $1.7 billion in fines after admitting in 2012 and 2019 to violating sanctions on Iran and other blacklisted countries. However, the latest court filings claim that relevant evidence was ignored by American authorities.
Knight’s court filing alleges that the U.S. government committed a “colossal fraud” against the legal system by denying he had presented “damning evidence” that Standard Chartered “facilitated many billions of dollars in banking transactions for Iran, numerous international terror groups, and the front companies for those groups.” Some of the evidence presented showed that the bank’s clients included front companies for Iran’s Revolutionary Guard, Palestinian militant group Hamas, Lebanon’s Hezbollah, and Iran-linked entities in various countries.
The report by the International Consortium of Investigative Journalists reveals that two whistleblowers alleged that U.S. authorities who investigated Standard Chartered made false statements to a court in order to have their claim for a whistleblower’s reward dismissed in 2019. The authorities claimed that the whistleblowers’ claims did not lead to the discovery of any new violations. Subsequently, the court dismissed the case as “meritless.” CNBC has reached out to the U.S. Department of Justice for comment on these allegations.
The implications of these allegations are significant, as they raise questions about the integrity of financial institutions and regulatory authorities. If proven true, the allegations against Standard Chartered could have serious repercussions for the bank, both financially and reputationally. Additionally, the case highlights the importance of whistleblowers in uncovering potential wrongdoing within organizations and the challenges they may face in seeking justice and accountability.
The allegations of Standard Chartered financing sanctioned Iranian entities and terrorist groups, along with the claims made by whistleblower Julian Knight, shed light on potential misconduct within the bank. These allegations, if proven true, could have far-reaching consequences for Standard Chartered and underscore the need for transparency and accountability in the financial sector. It is essential for regulatory authorities to thoroughly investigate these claims and hold any wrongdoers accountable to maintain the integrity of the financial system.