Sir John Peace Should Resign As Chairman of Standard Chartered Bank

By Simon Johnson

On Thursday, March 21, Sir John Peace conceded that he lied to investors on March 5, 2013 when he said of Standard Chartered Bank,

“We had no willful act to avoid sanctions; you know, mistakes are made – clerical errors – and we talked about last year a number of transactions which clearly were clerical errors or mistakes that were made…”

Specifically, he now says that these remarks were “both legally and factually incorrect” because Standard Chartered had previously conceded that it deliberately laundered money. 

In plain English, what Sir John said is called lying.  Or, if you prefer the language of securities lawyers, he engaged in deliberate misrepresentation.  He also violated Standard Chartered’s deferred prosecution agreement with US authorities.

Here is the full statement today.

Sir John should resign immediately as chairman of Standard Chartered.

Look carefully at the dates.  He lied to investors on March 5 but did not issue this correction until March 21 – apparently after US regulators threatened the bank with renewed prosecution.

If the March 5 remarks were a genuine mistake, Sir John could have retracted them the same day.  March 6, 7, and 8 were also pretty much wide open for retractions.

Standard Chartered – in the person of Sir John – has deceived prosecutors, regulators, and the investing public.  This is outrageous executive behavior and it cannot be tolerated in a company that holds a US banking license.

If Sir John does not resign, he should be removed by the board of Standard Chartered.

If the bank’s board refuses to act, this will signal that it is not competent to oversee the operations of a global bank. 

Senator Elizabeth Warren asked recently: before you lose your banking license,

“How many billions of dollars do you have to launder for drug lords?”

Fed Governor Jerome Powell replied (with the wording from the same Politico article),

“I’ll tell you exactly when it’s appropriate” to consider pulling a bank’s license, he said. “It’s appropriate when there’s a criminal conviction.”

Standard Chartered Bank signed a deferred prosecution agreement which, among other things, requires it to take responsibility for its previously illegal sanction-busting actions.

If the chairman publicly and deliberately denies responsibility – in explicit violation of this agreement – he should step down or be forced out.  How can the authorities now have any reasonable confidence that Standard Chartered will comply with the rest of its agreement, including,

“Under the cease and desist order, Standard Chartered must improve its program for compliance with U.S. economic sanctions, Bank Secrecy Act, and anti-money-laundering requirements.”

If Sir John does not go, Mr. Powell and his colleagues should pull the bank’s license.

If under such circumstances the Board of Governors of the Federal Reserve finds it cannot take action, then we must consider amending the Federal Reserve Act.

11 thoughts on “Sir John Peace Should Resign As Chairman of Standard Chartered Bank”

  1. The fundamental issue is correct, However: It’s a “banking charter” that needs to be “withdrawn.”. It is a “privilege” to receive a “banking charter” for any State to accept “deposits” from residents and businesses that operate in that State. If the OCC issued the charter, than it is the State banking regulators from the affected States that need to talk to the OCC to have the operations removed while transferring the deposits to banks that do operate and recycle the deposit funds into the local State economy.

  2. Will defer to my posting colleagues and the gracious Senator from Massachusetts for continued clarity and understanding on the issues – we love you Senator Warren – see ya in the White House. (Lawrence O’Donnell & corporate Democrats should tone down their advocacy for Hillary 2016 – at least stop being so obnoxiously pushy.)

  3. Wow. I imagine the DOJ is going to throw at that a$$hole. Ag holder don’t take no shit from punks like this

  4. LOL AG Holder, you mean “Place”? The guy who said “I can’t be all worried about all these pesky so-called “laws” I’m supposed to enforce, because these particular proven lawbreakers are just really really big & powerful?” What a joke. Steal $100, go straight to jail. Steal $1 billion, go straight to dinner at the White House.

  5. Fed Governor Jerome Powell replied (with the wording from the same Politico article),

    “I’ll tell you exactly when it’s appropriate” to consider pulling a bank’s license, he said. “It’s appropriate when there’s a criminal conviction.”

    In other words, “never” since these banks are too-big-to-indict and their executives are too-big-to-jail. This is a pathetic response from yet another arrogant regulator who is too out of touch to cover himself with some PR-speak.

  6. To b fair I think the threat of losing your us banking license is just so huge for international banks that they basically have to concede guilt, pay the fine, apologize whatever…I don’t think they believe they did that much wrong but they can’t really fight it…I think he just departed from the script and then the us authorities got on his case…and told him to stick to the script…I mean many of the us legal actions recently against banks r justified but that doesnt mean they all are necessarily…. virtually all r settlements for sums well below that claimed so we don’t really get a final judgement do we? I suspect u r unlikely to agree

  7. All apologies for this hopefully forgivable digression…..Our Simon…. Left us Baseline readers hanging about Cyprus. Now was that nice or fair? Here, for the convenience of the peanut gallery, are two links to negate the deafening silence about Cyprus (on this blog anyways) from the Professor who might still be reeling from his last post about Europe (with his British sidekick) in which he got partially skewered (unfairly) for being unduly alarmist:

    http://www.charlierose.com/view/interview/12831

    http://economix.blogs.nytimes.com/2013/03/21/the-london-whale-richard-fisher-and-cyprus/

    P.S. I’m with Mister Farage on this: Europeans need to get their money out of their banks immediately. There will very soon be contagion and capital controls first throughout the Eurofascistzone and then in the USFascistAmerica. Cheerio!

  9. No doubt Sir John and Standard Charter Bank are ToBigToProsecute. Don’t hold your breath for any short term remedy or anything close to that thing we call justice. But there is only so much abuse the people will suffer. The writing is on the wall and long term – there will be a threshold when the people have had enough and suffered enough – and all the legal peaceful remedies for hold these den of vipers and thieves and predatorclass criminals accountable will be deemed and appreciated as futile. When that day comes – allbetsareoff – it will be guns, guns, guns, and real horrorshow remedies and recompense will be demanded and executed.

    Burn it all down!!! Reset!!! It’s the only option for the 99%!!!

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