New York regulators have accused global bank Standard Chartered of being in cahoots with the Iranian government in a $250-billion (201.4 billion-euro) money laundering scheme.
New York State Financial Services Superintendent Benjamin Lawsky has signed an order for Standard Chartered to answer his questions following an investigation.
Regulators say that the bank worked with government-owned banks in Iran - including the central bank - and other entities there for nearly seven years to hide around 60,000 transactions worth $250 billion between 2001 to 2010. The bank allegedly made "hundreds of millions in fees," according to the US authorities.
The bank, which is London-based but acts globally, has been accused of "systematic misconduct" that may have allowed terrorists and criminals to gain access to Iran's banking system.
Regulators in New York - the hub of the US financial industry - have threatened the bank with fines and the suspension of its license if it is unable to explain the transactions, which they say regulate current US sanctions on Iran.
New York banking licenses allow foreign banks to operate a hub to handle transactions in the world's number one currency, the US dollar.
The transactions "left the US financial system vulnerable to terrorists, weapons dealers, drug kingpins and corrupt regimes, and deprived law enforcement investigators of crucial information used to track all manner of criminal activity," regulators said.
ng/tj (AP, AFP, Reuters)