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US authorities turn spotlight on RBS over Iran dealings

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US Federal authorities are reportedly investigating RBS over possible dealings with Iran, the latest case of a UK bank coming under scrutiny from US regulators.

The Federal Reserve and Department of Justice are probing RBS after the bank volunteered information to them and UK regulators 18 months ago, according to the Financial Times.

The investigation, centring on possible breaches of Iran sanctions, has already led to the departure of a senior risk manager at the bank, the paper said, citing a source familiar with the matter.

RBS itself uncovered the issues when CEO Stephen Hester began an internal review soon after his arrival in 2009, the FT added.

Last week UK peer Standard Chartered agreed to pay a $340m fine to the New York state department of financial services, lawmaker Benjamin Lawsky having accused it of being a “rogue institution” regarding its dealings with Iran.

Standard Chartered’s share price fell over 25% from its pre-scandal highs before subsequently recovering most of those losses. Lawsky is not involved in the RBS probe.

HSBC has also been under the spotlight in the US in recent months amid an investigation into alleged money laundering.

The bank was fined $27.5m by Mexican authorities and may face further penalties in the US after executives were grilled in a Senate hearing in July.

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