On August 6, the superintendent of the New York State Department of Financial Services (DFS) published the outcome of an investigation into Global Investment Strategist Model Portfolio holding Standard Chartered Bank (London: STAN).

The DFS argues that, for nearly a decade, Standard Chartered “programmatically engaged in deceptive and fraudulent misconduct in order to move at least USD250 billion through its New York branch on behalf of client Iranian financial institutions that were subject to US economic sanctions, and then covered up its transgressions.”

It has been our view that Standard Chartered is one of the best-run financial institutions in the world. Although nothing can be ruled out, it is difficult to believe that the bank’s management has been committing such flagrantly illegal acts for a decade.

The bank’s shares have been hit hard, but for now our recommendation is to hold the stock and wait to see how the scandal unfolds. For more details on Standard Chartered, read tomorrow’s issue of GIS.