When do US sanctions on Iran move a share price?
Standard Chartered, 2012: New York regulator order
Short answer: the bank knew about the problem from 2009, but we couldn’t confirm the market did. The shares fell 17% the day after the order.
What happened
- The action: on 2012-08-06, after the London close, New York’s financial regulator (DFS) accused Standard Chartered of hiding about 60,000 payments for Iranian clients, worth about US$250bn, from 2001 to 2007. It threatened the bank’s licence to operate in New York (DFS order).
- Afterwards: on 2012-08-14 the bank settled with DFS for US$340M (Wikipedia, sourced).
Warning signs before the action
- What the order says: Standard Chartered began an internal investigation in early 2009 after law enforcement contacted it, and told DFS about it in May 2010 (DFS order, paragraph 53).
- Not verified: whether the bank disclosed the US inquiries in its own annual reports before 2012. We think it did, but we haven’t checked.
Share price before and after
- Before the action (against the local index): +2.0% over 60 trading days, 0.0% over 20, −4.4% over 5.
- After: −17.0% after 1 trading day, −9.7% after 5, −4.9% after 20. “After 1 day” is 2012-08-07, the first London session after the order.
What this shows
- The surprise was the size of the claim and the threat to the licence, not the investigation itself. The fall halved once the bank settled.
How we measured
- Share move: the company’s share price change minus the local index change, from daily closing prices (Yahoo Finance).
- Before: from the close 60, 20 and 5 trading days before the action, up to the last close before it.
- After: from that last close to 1, 5 and 20 trading days later.
- Data and code: case_study_summary.csv, case_study_price_paths.csv, scripts/case_studies.py.
- Saved sources: receipts/case-studies.