Investment giant Standard Chartered faces a significant lawsuit amounting to $2.7 billion, linked to the 1MDB scandal.
In a significant development, Standard Chartered is facing a $2.7 billion lawsuit in Singapore's High Court, instigated by liquidators acting for three companies in liquidation linked to the 1MDB scandal. The suit alleges that Standard Chartered failed to conduct necessary anti-money laundering checks and enabled the laundering of billions of dollars stolen from the Malaysian sovereign wealth fund between 2009 and 2014 [1][2][3].
The liquidators, represented by Kroll, claim that Standard Chartered permitted over 100 intraday transfers during 2009-2013 that helped conceal the flow of stolen 1MDB funds [1][3]. These transfers reportedly demonstrate serious breaches and control failures, which facilitated the theft of public funds by high-level individuals in the Malaysian government during that period [1].
However, Standard Chartered denies wrongdoing. A spokesperson for the bank stated that it has not received formal legal documents and emphatically rejects any claims made in the lawsuit [2][3]. The bank also highlights that these transactions date back to 2010, that it reported suspicious activities and closed the accounts by early 2013, and that it has cooperated with investigating authorities [3].
The lawsuit could lead to the largest financial penalty ever imposed on a bank in Singapore if successful [3]. Previously, Singapore’s financial regulator fined Standard Chartered $5.2 million in 2016 for significant deficiencies in customer due diligence procedures related to 1MDB matters [3].
Key transfers mentioned in the lawsuit include a $150 million transfer from Blackstone Asia directly to the personal bank account of Najib Razak, who is currently serving a six-year prison sentence for corruption and money laundering, and another transfer by Alsen Chance, which sent $53.4 million to jewelry, watch, and bag vendors to fund luxury goods purchased by Razak's wife Rosmah Mansor [1][2].
The Malaysian people were identified as the true victims of this global fraud, according to the statement. The board of 1MDB stated that they are pleased to see the court-appointed liquidators taking action to benefit the victims of the fraud, including 1MDB [6].
Other banks, including Goldman Sachs, have also been penalized for similar violations. In 2020, Goldman Sachs reached a $3.9 billion settlement with Malaysia to resolve criminal and regulatory charges [4]. Two of Goldman Sachs' top executives, Tim Leissner and Roger Ng, landed prison sentences for their roles in the scheme [4].
The lawsuit underscores the importance of strict anti-money laundering measures in the financial industry. Standard Chartered takes its responsibility to fight financial crime extremely seriously and has made significant investments in strengthening its controls and uplifting its anti-money laundering standards [7].
[1] Reuters, "Singapore court-appointed liquidators sue Standard Chartered for $2.7 billion over 1MDB scandal," June 22, 2023. [2] Bloomberg, "Standard Chartered Denies Wrongdoing in $2.7 Billion 1MDB Lawsuit," June 22, 2023. [3] Financial Times, "Standard Chartered faces $2.7bn lawsuit over 1MDB scandal," June 22, 2023. [4] Wall Street Journal, "Goldman Sachs Settles 1MDB Case for $3.9 Billion," March 12, 2020. [5] The Edge Markets, "1MDB: Court-appointed liquidators sue Standard Chartered for $2.7bn," June 22, 2023. [6] Bernama, "1MDB: Court-appointed liquidators sue Standard Chartered for $2.7bn," June 22, 2023. [7] Standard Chartered, "Our commitment to fighting financial crime," n.d. (accessed June 22, 2023).
- This $2.7 billion lawsuit against Standard Chartered in Singapore's High Court, linked to the 1MDB scandal, is a significant development in the realm of finance and general-news, as it could set a new record for the largest financial penalty ever imposed on a bank in Singapore.
- The business actions of Standard Chartered, as alleged in the lawsuit, seem to involve crime-and-justice matters, with claims of serious control failures that facilitated the laundering of stolen funds from the Malaysian sovereign wealth fund between 2009 and 2014.
