The High Court has ordered that Standard Chartered, the high-profile global bank, must hand over documents related to communications with US and Singaporean regulators. In doing so, it dismissed the company’s argument that it faced criminal prosecution if it disclosed the information to investors.
Standard Chartered is currently embroiled in a £1.5 billion claim. Investors accused it of concealing critical information concerning sanctions breaches involving Iran. At issue were crucial regulatory disclosures and whether they were misleading or incomplete.
Why does this matter? Because clear, accurate disclosure underpins investor rights, market integrity, and confidence in financial markets. Therefore, the ruling in Various Claimants v Standard Chartered PLC ordering disclosure provides clarity for investors in England and Wales who have investments in companies caught up in allegations of breaching UK, US, EU, or UN sanctions.
Background: The Standard Chartered Sanctions Scandal
Standard Chartered has made headlines in recent years for breaching Iran sanctions, prompting hefty fines from US and UK regulators. The bank was penalised for processing transactions that violated anti-money-laundering rules tied to Iranian interests. These incidents severely damaged its reputation and triggered internal regulatory overhauls.
Between 2007 and 2019, StanChart issued investor communications, including prospectuses, that glossed over the real extent of its sanctions exposures. Those documents formed the backbone of investor expectations and are now the basis of legal claims.
The Claimants and Their Allegations
The claimants represent a coalition of more than 200 institutional investors, totalling around 1,400 funds. Their case is straightforward but far-reaching: they allege that Standard Chartered issued prospectuses and other disclosures that were untrue or misleading, failing to disclose regulatory breaches and thereby distorting investor understanding.
The essence of the claim is based on “common reliance” or “fraud on the market” theory. In short, this doctrine provides that if a company makes a false or misleading statement that affects its share price, investors who bought or sold shares during that time can bring a civil claim against the company. Critically, the investors do not have to have read the documents containing the misleading statement themselves to claim reliance. What matters is that the misleading statement influenced the share value.
Standard Chartered’s legal arguments
Standard Chartered resisted disclosure at every turn, arguing that giving up certain documents would breach confidentiality duties and expose it to prosecution in the US and Singapore. Among the most sensitive materials were internal regulatory reports and communications with foreign authorities.
The Civil Procedure Rules, Part 31, however, sets a firm test for disclosure. Documents are disclosable if they are relevant, in the party’s control, and not protected by privilege or confidentiality, such that non-disclosure would be just. The question for the court was – did legitimate privilege exist, or was this a shield against presenting inconvenient evidence?
Judge Green’s Analysis and Ruling
Judge Green delivered a firm answer. The asserted risk of prosecution abroad was found exaggerated, and there was no credible threat in the US or Singapore that could justify non-disclosure. The judge concluded that public policy favours disclosure in the interest of justice and the effective conduct of civil litigation.
Ultimately, the court ordered full disclosure of the documents at issue, rejecting confidentiality claims in this context. The ruling underscores that confidentiality cannot be used to avoid presenting documents if, under the Civil Procedure Rules, transparency is clearly warranted.
What does the decision in Various Claimants v Standard Chartered PLC mean in practice?
This case marks a critical moment for common reliance or fraud on the market claims in England and Wales. Unlike the US, where such claims are well established, English courts have traditionally been cautious. The StanChart ruling gives new credibility to such claims, making them more viable and reinforcing investor protection.
Previously, StanChart unsuccessfully attempted to strike out nearly half the claimants’ cases, which the court rejected. That decision showed the English courts’ willingness to allow such group claims to proceed.
The potential liability for Standard Chartered is enormous, as a £1.5 billion claim is not merely symbolic. Prior fines and reputational damage leave the bank in a highly precarious position.
The ruling sends a clear message to regulators and boards: transparency matters, and failure to secure it can result in both financial cost and erosion of market trust.
What Happens Next?
With disclosure ordered, the case moves into a crucial phase: reviewing the revealed documents, testing their impact, and preparing for trial. Standard Chartered may still seek an appeal, though its narrow window of confidentiality exception has been severely curtailed.
Conclusion
This case is a powerful reminder that transparency and accountability are not optional. The courts have taken a firm stand that excuses cannot justify withholding critical information in a civil fraud claim. For investors, it offers renewed hope that legal recourse remains alive where misstatements or omissions occur.
FAQs
What is a “common reliance” or “fraud on the market” claim?
A legal theory where investors sue on the grounds they relied on public statements that were misleading. They need not prove personal reliance if the statements inflated the market as a whole.
Why did Standard Chartered want to withhold documents?
The bank claimed confidentiality and risk of foreign prosecution, particularly in the US and Singapore, as reasons not to disclose internal and regulatory materials.
What did Judge Green decide about confidentiality?
He ruled that the alleged prosecution risk was exaggerated and that confidentiality did not outweigh the importance of disclosure in civil justice.
What does this mean for future investor litigation in England and Wales?
It strengthens the standing of group investor claims, particularly those based on omissions or misleading disclosures, opening a door for broader securities litigation.
How should financial institutions respond?
They should review and enhance disclosure controls, ensuring investor communications are accurate, complete, and defensible, especially in multi-jurisdictional claims.
To discuss any points raised in this article, please call us on +44 (0) 203972 8469 or email us at mail@eldwicklaw.com.
Note: This article does not constitute legal advice. For further information, please contact our London office.
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