Friday, August 22, 2014


The spin masters as Standard Chartered are hard at work;  media stories originating from the bank now boldly confess that their AML program was flawed for the past two years. Any good anti-money laundering program never relies upon one asset to protect a bank from suspicious transactions. To assert that the bar was set too low, so as to avoid false positives, and that this caused the errors, strains credibility. What about the compliance officers who were supposed to be the gatekeepers ? Why did they fail to catch this ?

The reports state that a large number of suspicious Hong Kong transactions were approved, notwithstanding that China is a well-known jurisdiction for sanctions evaders, is extremely disturbing. Where the blazes were the bank's compliance officers in all this ? Checking the boxes, instead of actually looking at the transactions, or were their warnings disregarded ? That is the most important question here. Was it compliance malpractice, or management greed that resulted in the massive violations, not just in recent years, but earlier, when the bank was hit with the first major civil penalty.

If there ever was a case where the responsible parties need to go to Federal Prison for Willful Blindness, this is it.  There's no individual accountability here, just a huge fine, which the bank can easily absorb, out of profits; Justice has not been served.

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