Bloomberg
Barclays, HSBC Holdings and four other banks were accused in a lawsuit by US soldiers of helping Iran process billions of dollars in transfers and finance terrorists who attacked Americans serving in Iraq.
Lenders including Standard Chartered Bank, Credit Suisse Group and Royal Bank of Scotland conspired with Iran and its banks to withhold certain data from transactions, enabling them to circumvent monitoring by US regulators, the soldiers said in a complaint yesterday in federal court in Brooklyn, New York.
The conspiracy, dating back to 1987, provided Iran with a means to transfer at least $150mn to Hezbollah and other terrorist and militant groups, allowing them to carry out dozens of roadside bombings and other attacks against the US military, according to the complaint.
“This is a lawsuit that could materially alter the US banking landscape,” Sandy Chen, an analyst at Cenkos Securities in London, said in a note to clients. “If these allegations are shown to be true, an avalanche of anti-terrorism legislation would tumble upon these non-US banks” including a “possible suspension of US banking licenses,” he added.
Each bank “understood that its conduct was part of a larger scheme engineered by Iran,” according to the complaint. “Each defendant also knew, or was deliberately indifferent to the conspiracy’s purposes and criminal objectives.”
Soldiers wounded in attacks and families of those who were killed are seeking unspecified damages.
Representatives of Barclays, HSBC, Royal Bank of Scotland, Credit Suisse and Standard Chartered declined to comment on the lawsuit. A call to the offices of another defendant, a UK unit of Iran’s Bank Saderat, wasn’t immediately returned.
Standard Chartered agreed in August 2012 to pay $340mn to the New York Department of Financial Services for its role in hiding or disguising the identity of Iranian clients in billions of dollars’ worth of wire transfers. In December of that year, the bank agreed to pay $327mn to resolve similar issues with the US Justice Department, the Federal Reserve, the Treasury Department’s Office of Foreign Assets Control and the Manhattan District Attorney.
