Standard Chartered facing court case after investors accuse bank of making misleading statements about breaching US sanctions against Iran
Standard Chartered is facing a court case after investors accused the bank of making misleading statements about breaching US sanctions against Iran.
The High Court action claims the UK bank withheld information when it paid a £415million fine in 2012 over its dealings with Iranian firms, which were barred under US rules.
The fine was paid on the understanding that Standard’s links to Iranian individuals and companies had ended in 2007. It later emerged that the bank, which has a big presence in the US, had dealings with Iranian firms long after 2007.
In the dock: The High Court action claims the UK bank withheld information when it paid a £415million fine in 2012 over its dealings with Iranian firms, which were barred under US rules
Standard was hit by a further £900million fine in April 2019 for breaching the sanctions after a US investigation found it had been dealing with Iranian, Cuban and Sudanese individuals and entities.
The new legal claim centres on allegations that investors bought Standard shares at ‘artificially inflated’ prices as a result of ‘untrue or misleading’ statements. The shares peaked at more than £17 in 2010 and were above £15 in 2012. They are now £4.51.
More than 100 UK and US trustees, retirement funds and other investors have joined the class action which was lodged with the High Court in September.
If the action succeeds, the bank could receive a flood of claims from other investors. The case is the latest twist in a decade-long affair that has cost it £1.6billion in fines.
The Mail on Sunday revealed in 2019 that British whistleblower Julian Knight, a former Standard executive, had gone to the US authorities in 2012 alleging the bank was breaking sanctions on Iran.
He accused the bank of having ‘blood on its hands’ by dealing with Iranian firms connected to Iran’s Revolutionary Guard as British and US troops were targeted by Iranian supported groups. The UK legal claim now also threatens to expose alleged complicity in the breaking of US sanctions at the bank’s ‘highest levels’ – with a raft of former Standard Chartered executives named.
These include Richard Meddings, now TSB Bank chairman, and Mike Rees, who is a board member at Dutch giant ING, who are accused of having ‘the requisite knowledge’ of the ‘relevant misconduct’.
The claim is not expected to reach court until 2024. Neill Shrimpton, a partner at Brown Rudnick, who is leading the claim, said: ‘Our clients are institutional investors who take Environmental, Social and Corporate Governance seriously.
‘They have legitimate concerns about the serious breakdown in ESG at Standard Chartered that has led to a loss in shareholder value. Our clients seek accountability and compensation for that loss.’
Standard Chartered and Rees declined to comment. Meddings did not respond to requests for comment.