Standard Chartered was today accused of exposing the US to terrorists, drug dealers and weapon dealers by hiding $250 billion of transactions with the Iranian government.
Standard Chartered is one of the top five largest banks in the UK by market value.
It kept around 60,000 transactions secret from US regulators over nearly 10 years, the New York State Department of Financial Services claimed.
The bank employs nearly 90,000 people worldwide.
It has been called to appear before regulators to explain the apparent violations and defend its licence to trade on the New York Stock Exchange.
The investigation's findings come after fellow British bank HSBC was accused of allowing drug cartels and rogue states to launder billions of pounds through its US arm.
The findings include a memo sent in October 2006 from the bank's US chief executive to the group executive director in London raising concerns about the activities with Iran.
"Firstly, we believe (the Iranian business) needs urgent reviewing at the group level to evaluate if its returns and strategic benefits are ... still commensurate with the potential to cause very serious or even catastrophic reputational damage to the group," he said
"Secondly, there is equally importantly potential of risk of subjecting management in US and London (for example you and I) and elsewhere to personal reputational damages and/or serious criminal liability," he added
To which the group executive director allegedly replied: "You..... Americans. Who are you to tell us, the rest of the world, that we're not going to deal with Iranians."
The regulator claims that between January 2001 until 2010, Standard Chartered conspired with Iranian clients to route payments through New York after first stripping information from wire transfer messages used to identify sanctioned countries.
The bank moved the transactions through its New York branch on behalf of Iranian financial institutions that were subject to US economic sanctions, and then covered up the dealings, the banking regulator claimed.
The institutions included the Central Bank of Iran, as well as Bank Saderat and Bank Melli, both of which are also Iranian state-owned institutions.
