After HSBC, Standard Chartered India under US scanner

The US regulatory order also accused StanChart of deficient money laundering controls in its outsourcing of work to India, which the bank has refuted.

NEW YORK/LONDON/MUMBAI: Outsourcing of key oversight jobs by global banks to India has come under the scanner for the second time in less than a month for exposing the US financial system to terrorists and money laundering risks.

On the heels of a probe by the US Senate's Permanent Committee on Investigations pointing out major lapses in the work of HSBC's India staff, another UK-based banking giant Standard Chartered's outsourcing of key banking jobs to Indian shores have come under the scanner in the US.

A probe by the New York State's key banking regulator, the Department of Financial Services (DFS), has found deficient money laundering controls in outsourcing of work by StanChart to India, thus exposing the US financial system to terror financing and other risks.

The findings in these two separate probes have come at a time when the voices against outsourcing of jobs to India and other locations are gaining momentum in the US, ahead of the Presidential elections in November.

In an order last night, the DFS accused StanChart of hiding secret transactions involving USD 250 billion with Iran -- leaving the US financial system vulnerable to terrorists, weapons dealers, drug kingpins and corrupt regimes.

The DFS probe found that SCB had assured the New York state in May 2010 that it would take immediate steps to comply with the US Office of Foreign Assets Control (OFAC) sanctions. However, another regulatory examination in 2011 found continuing and significant Anti Money Laundering failures.

Among these, the bank was outsourcing its "entire OFAC compliance process for the New York branch to Chennai, India, with no evidence of any oversight or communication between the Chennai and the New York offices."

The OFAC is the designated US government agency for preparing list of entities with whom US citizens and entities are barred from doing any business.

Standard Chartered slumps 20% in India

The Standard Chartered Bank stock today plunged by up to 24 per cent in the Indian and UK markets, as the New York state in the US threatened to revoke its licence and charged it of USD 250 billion worth secret transactions with Iran.

At the Bombay Stock Exchange, the scrip fell 19.97 per cent to hit its lowest permissible limit for the day at Rs 83.15. On the NSE, the scrip was down 19.97 per cent at Rs 82.95.

At the London Stock Exchange, Standard Chartered shares plunged 23.9 per cent to 1,119 pence in morning trade.

The New York state has threatened to revoke the bank's licence after charging the UK-based global banking giant of operating as a "rogue institution" and hiding over 60,000 transactions worth USD 250 billion with Iran.

While the bank has refuted the charges saying that more than 99.9 per cent of its Iran-related transactions complied with the US regulations, the New York State Department of Financial Services (DFS) has charged StanChart of exposing the US financial systems to terrorists, drug kingpins and weapon dealers through its transactions with Iran for about 10 years.

In a 27-page order, the Superintendent of Financial Services Benjamin Lawsky of DFS said that "grounds exist for revocation of Standard Chartered Bank's licence to operate in the State of New York and that interim measures must be taken to protect the public interest."

The order accused Standard Chartered of operating as a "rogue institution" which was "motivated by greed."

Reacting to the regulator's order, Standard Chartered said it "strongly rejects" the position and portrayal of facts made by DFS.

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9/11 families want information on phone hacking probe

NEW YORK: Relatives of September 11, 2001 victims are asking the FBI to brief them on its probe into allegations that News Corp journalists sought to hack into terror victims' phones.

The allegation first surfaced in the British newspaper the Mirror. The FBI launched a preliminary inquiry last week after Congressman Peter King of New York and other members of Congress wrote to FBI Director Robert Mueller demanding action.

Sally Regenhard, whose firefighter son Christian was killed in the attacks, says she's been fielding phone calls from concerned family members of victims. She says there's a lot of confusion and the families want an update on what investigators know so far.

The phone hacking scandal continued to roil London yesterday as Prime Minister David Cameron called an emergency session of Parliament to address the crisis.

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'Strauss-Kahn slept with 3 women on assault weekend'

'Kahn slept with 3 women on assault weekend'

NEW YORK: Former IMF chief Dominique Strauss-Kahn, who was freed from house arrest recently, slept with three women in the course of a few hours over the weekend of the alleged assault on a maid at a Manhattan hotel, a media report has claimed.

Le Point magazine reported that the former chief of the IMF told his wife Ann Sinclair that he slept with three women as a last romp before the presidential election in France.

"It wasn't just one for the road before the presidential campaign," a friend of Ann Sinclair said. "It was three."

Strauss-Kahn's wife, who is with him in New York, continues to defend her husband. "Dominique has never been violent with anyone," she told friends, as quoted by The Sunday Times. "Even the children, he never smacked them. He's a seducer, not a rapist."

Sinclair, 64, told friends that her husband had warned her of his "skirt chasing" ways ahead of marriage. "Don't marry me. I'm an incorrigible skirt chaser." After he had cheated on her, he would tell her, "I warned you".

The New York Post had previously reported that Strauss-Kahn had tried to hit on a hotel receptionist but was rebuffed.

Hours before the alleged assault, a woman from the banking world was reportedly seen entering the Sofitel Hotel with him.

The court date for the next hearing of the sexual assault case against Dominique Strauss-Kahn was postponed from July 18 till August 1.

The case against Strauss-Kahn has been weakened considerably after it emerged that maid has been lying to investigators. Strauss-Kahn's lawyers have asked for dismissal of the charges against him. They say that the sexual encounter between their client and the maid was consensual.

But legal experts say that the maid's lies doe not automatically lead to a dismissal. Kenneth, Thompson, the maid's lawyer, has also asked prosecutors not to drop the case against Strauss-Kahn.

Strauss-Kahn currently lives in a posh pad in New York that costs USD 50,000 a month.

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