Standard Chartered settles £1.5bn investor lawsuit over Iran sanctions disclosures
More than 200 claimants, representing about 1,400 investment funds, had sued the UK-listed lender in London, arguing that they were misled by the bank’s public statements and omissions.
Standard Chartered has reached a settlement in a £1.5bn investor lawsuit that alleged the bank’s breaches of Iran sanctions were more extensive than it has publicly admitted.
More than 200 claimants, representing about 1,400 investment funds, had sued the UK-listed lender in London, arguing that they were misled by the bank’s public statements and omissions, particularly on its compliance with US sanctions on Iran. They claimed they bought or held StanChart shares on the basis of incomplete or inaccurate information and suffered losses as a result.
The case was due to go to trial next October but settled shortly after the Court of Appeal ruled that Standard Chartered would have to hand over sensitive documents. The bank had resisted this disclosure, arguing that releasing the material could breach duties of confidentiality owed to foreign regulators and potentially expose it to regulatory or even criminal consequences overseas.
In its judgment, the Court of Appeal noted that “after a draft of this judgment was circulated to the parties, they reached a settlement of the entire action”. The financial terms were not made public.
Standard Chartered said in a statement that it “has always denied any and all liability” but had agreed to settle “to bring this matter to a close”. It added that the settlement was not material to the group’s operating performance or financial position.
Woodsford, the litigation funder that backed the claim, welcomed the outcome. Its chief investment officer, Charlie Morris, said the firm was “proud to have assisted this large group of institutional investors in seeking to hold Standard Chartered to account and achieving compensation for them”.
The claim formed part of a growing wave of shareholder actions in London, mirroring long-established practice in the US. Most such cases in England have settled before trial, leaving limited case law on key issues in securities litigation.
In its latest half-year report, Standard Chartered said the lawsuit alleged that the bank made untrue or misleading statements, and failed to disclose relevant information, about its past sanctions, anti-money laundering and financial crime compliance record. The claimants also accused the bank of similar failings in relation to rights issue prospectuses in 2008, 2010 and 2015.
The suit was brought against the backdrop of substantial regulatory penalties. In 2019, StanChart agreed to pay $1.1bn to US and UK authorities over Iran sanctions violations and failures to act on warning signs about certain customers. That deal included a guilty plea by a former employee and followed an earlier $667m settlement and a deferred prosecution agreement with US prosecutors over similar conduct.
The investors in the English civil case alleged that the misconduct went beyond what the bank had acknowledged to regulators, accusing Standard Chartered in court filings of pursuing a “systemic” strategy of building its Iran-related business in breach of sanctions.
