This effort comes a day after Standard Chartered hired the banks' facing regulatory scrutiny get out of jail free law firm of Sullivan & Cromwell.
The result of the Washington-based financial regulators taking over the negotiations will be that Standard Chartered will get a trivial slap on the wrist settlement (remember: they broke the law by money-laundering and should lose their NY banking license).
Even the WSJ knows the fix is in as it references the simple fact that different regulators have different agendas for what Standard Chartered's punishment should be.
U.S. authorities are forming a group with New York's top financial regulator to negotiate a settlement with Standard Chartered PLC over allegations it illegally hid financial dealings with Iran.
The U.S. Treasury Department, Federal Reserve, U.S. Department of Justice and Manhattan district attorney's office are scrambling to reach an understanding with the New York State Department of Financial Services over the ground rules for negotiations with the U.K.'s fifth-largest bank by assets, according to people familiar with the talks....
The U.S. regulators' talks are at an early stage, and negotiators are trying to find common ground before Aug. 15, when Standard Chartered is due to appear at a hearing before the New York financial watchdog, the people said.
The discussions are tricky because several regulators have been probing Standard Chartered's dollar-clearing business with Iran since 2009, but the New York financial-services regulator this week issued an order alleging the company had conducted illegal transactions on a massive scale. The regulator, Benjamin Lawsky, also alleged the bank conducted a decadelong coverup of those actions.
Some other regulators may be taking a different view of Standard Chartered's actions and are advocating pursuing different remedies.
Mr. Lawsky threatened this week to revoke the bank's New York state banking license.
Previous cases involving allegations that a foreign bank broke U.S. trade sanctions were settled with multiple regulators with large fines.Large fines that were probably a fraction of the profits generated for the banks by the illegal activity.