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Mark Langerman on Standard Chartered Iranian Business

Expert Insights:  Mark Langerman

Mark J. Langerman is Managing Director of the Patriot Fund and in this role he assists with educational initiatives to raise public awareness for Terror-Free Investing.   Mr. Langerman has been nationally recognized as an expert on terror-free investing as it has gained popularity in recent years.  Among other speaking engagements, he has been interviewed by media outlets such as Fox News, Investors Business Daily, and Forbes in regards to his work with terror-free investing. 

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Patriot Fund Opinion on Standard Chartered Iranian Activities

By Mark J. Langerman

Earlier this week the New York State Department of Financial Services accused Standard Chartered PLC, a UK based global banking powerhouse, of conducting illegal banking transactions with Iran.  Corporate disregard for established law and international sanctions is exactly what a terror-free investing strategy aims to prevent.  As both an American and a Managing Director of the Patriot Fund, I am disgusted and concerned every time a report like this comes across my desk.  I’ve included some excerpts from a Wall Street Journal article published on Tuesday that detail the accusations of the Standard Chartered scheme.  Additionally, I’ve provided commentary detailing why actions like this could not only lead to risk in your investment portfolio, but also national security risk for the United States.  Please take some time to read the information below and consider joining us at the Patriot Fund in the terror-free investment movement.

 

WSJ Article; Monday, August 6, 2012

N.Y. Regulator Accuses Standard Chartered Unit of Illegal Transfers

By Liz Rappaport

Click here to read full article

 

  • In 2006 Standard Chartered’s chief executives for the Americas urged a review of Iranian business because of “very serious or even catastrophic reputational damage” and management's exposure to “personal reputational damages and/or serious criminal liability.”
  • The agency alleged a systematic conspiracy to falsify wire-transfer orders and to regulators. Mr. Lawsky [the NY State Dept. of FS superintendent] claimed that executives of the U.S. unit had extensive knowledge of the scheme, which allegedly lasted from 2001 to 2010.
  • Mr. Lawsky said the U.K. bank's subsidiary in New York made hundreds of millions of dollars in fees from its Iranian business… it processed $500 million a day in receipts for the National Iranian Oil Company, for example.

 

Now let me tell you why I believe you should be concerned by actions like the ones allegedly performed by Standard Chartered.   I believe that corporate behavior like this causes American investors to be subject to two major risks:  (1) national security risk and (2) investment portfolio risk.  Let me explain…

First, the United States government has identified Iran as a State Sponsor of Terrorism since January, 1984 because of their repeated support for acts of international terrorism.  Many companies that conduct business in Iran they are providing both funding and resources to the Iranian government.  Unfortunately, because of the corrupt practices of the government in place, the funding and resources frequently trickle down to support terrorist groups and their initiatives that threaten both our men and women in uniform and our national security.

Second, Standard Chartered stock dropped nearly 17% on Tuesday following the allegations of their business in Iran.  According to Bloomberg, these allegations could cost them up to $5.5b due to items such as fines, sanctions that would result in lost revenue, or resignations of senior executives.  Companies doing business in Iran subject themselves to unnecessary risks that could significantly impact their share value.  My assertion is supported by the SEC having launched an Office of Global Security Risk [View website] in 2005 to provide investors with this type of information.  A terror-free free investing strategy aims to reduce global security risk by screening for companies doing business in places like Iran and prohibiting investment in those names.

I wish Standard Chartered was an isolated incident, but unfortunately it’s anything but.  Specifically, other banks such as UBS, Credit Suisse, and ABN Amro have paid fines ranging from $80mm to $536mm for similar business they’ve conducted in Iran.  Even more surprisingly, there are currently over 600 businesses globally – 57 of which trade publicly on US exchanges – that maintain business ties in Iran.  I learned of this problem in 2007 during an industry conference in Washington D.C. and immediately developed a passion for it.  Since that time I’ve made it my mission to educate people whenever possible about terror-free investing and most recently I partnered with Ascendant Advisors to launch the Patriot Fund, a large cap equity mutual fund that pursues a terror-free investing strategy.  I hope you’ll take some time to learn more about how you can avoid assuming the unnecessary risks of investing in these companies by incorporating a terror-free investing strategy with the Patriot Fund.  

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PROSPECTUS DISCLOSURE:

Investors should carefully consider the investment objectives, risks, charges and expenses of the Patriot Fund. This and other important information about the Fund is contained in the prospectus, which can be obtained at http://www.ascendantfunds.com or by calling 855-527-2363. The prospectus should be read carefully before investing. The Patriot Fund is distributed by Northern Lights Distributors, LLC, member FINRA/SIPC. Ascendant Advisors, LLC. is not affiliated with Northern Lights Distributors, LLC.

RISK DISCLOSURE:

Mutual Funds involve risk including the possible loss of principal.  There is no assurance that the fund will achieve its investment objectives.  The Fund’s adviser has limited experience managing a mutual fund.   Because the adviser screens out Terror Nations-related issuers, this will reduce the number of potential investments available to the Fund and the Fund may not perform as well as unrestricted funds. A higher turnover may indicate higher transaction costs and could result in higher taxes when Fund shares are held in a taxable account.

1250-NLD-8/8/2012

Investors should carefully consider the investment objectives, risks, charges and expenses of the Ascendant Funds. This and other important information about the Funds are contained in the prospectus, which can be obtained at www.ascendantfunds.com or by calling 855-527-2363. The prospectus should be read carefully before investing. The Ascendant Funds are distributed by Northern Lights Distributors, LLC, member FINRA. Ascendant Advisors, LLC is not affiliated with Northern Lights Distributors, LLC.