The American government has rejected claims by two whistleblowers that it failed to properly investigate allegations of sanctions violations by Standard Chartered in a case that has drawn the personal attention of President Trump.
The FTSE 100 bank reached a $667 million settlement with the United States in 2012 and paid $1.1 billion to the American and British authorities in 2019 to settle allegations that it breached sanctions on Iran and other countries.
However, Julian Knight and Robert Marcellus have claimed they provided the US government with bank documents in 2012 and 2013 that showed other sanctions violations by Standard Chartered, which the lender denied.
The pair have been pursuing civil litigation since 2012 and alleged last year that they had uncovered hidden data in the documents that suggested Standard Chartered had handled billions of dollars worth of previously undisclosed transactions with Iranian entities and individuals.
The two men argued that the government had defrauded a US court when it had previously said it had comprehensively investigated their allegations. This claim was rejected and they appealed.
In a filing on Thursday, the US Department of Justice said the appeal court should uphold the earlier judgment and that the fraud allegation against the government was “entirely unfounded”.
It is a boost for Standard Chartered, not least because the case has become entwined in American politics over claims that Letitia James, the New York state attorney-general and a prominent opponent of Trump, had failed to act on the allegations against the bank.
Trump took to his Truth Social platform last week to post a link to an article on a far-right US website about the Standard Chartered allegations and James and called her a “disgrace”. Two days later, Elise Stefanik, a Republican congresswoman from New York state, called for an investigation into Standard Chartered and James, causing a sharp fall in the bank’s share price that wiped about £2 billion off its valuation.
A Standard Chartered spokesman said: “We are pleased and unsurprised by the DOJ’s filing, which continues to demonstrate what we’ve always known: the claims underlying this case are false.”
Knight said the authorities “appear to be entrenched in their misconduct”.