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In a significant legal victory for Standard Chartered Bank, a federal judge in New York has dismissed two lawsuits alleging the British bank provided indirect support to groups responsible for a dozen attacks in Israel and Iraq between 2010 and 2019.
U.S. District Judge Margaret Garnett ruled that the 90 plaintiffs—comprising victims, family members, and representatives—failed to show that Standard Chartered “knowingly and substantially assisted” the attacks. The plaintiffs had alleged that the bank facilitated billions of dollars in transactions for Iran’s central bank and other entities that were accused of supporting Hamas, Hezbollah, Jaysh al-Mahdi, and Palestinian Islamic Jihad.
Claims Under JASTA Fall Short
The lawsuits were filed under the federal Justice Against Sponsors of Terrorism Act (JASTA), which allows victims of terrorism to seek damages from entities that aid and abet such acts. Plaintiffs argued that Standard Chartered’s conduct violated JASTA by helping sanctioned Iranian entities gain access to the U.S. financial system despite repeated warnings from government officials.
Judge Garnett acknowledged that the bank had been accused of sanction-related violations in the past, but emphasized that the plaintiffs could not establish a direct link between the bank’s financial transactions and the specific attacks.
“Even under the most generous reading of the allegations, there are several steps between any conduct by SCB and the actions of those who directly perpetrated the attacks,” Judge Garnett wrote.
Standard Chartered’s Defense and Court’s Reasoning
Standard Chartered has consistently denied any involvement in terrorism, stating in court filings that it “did not commit any acts of terrorism and did not support any terrorist or attack.” The judge’s decision underscored that while the bank may have engaged in misconduct related to sanctions evasion, that behavior lacked the “direct nexus” required to hold it legally responsible for the violent incidents.
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The ruling dismissed both cases—Fraenkel et al v. Standard Chartered Bank (No. 24-04484) and Brauner et al v. Standard Chartered Bank (No. 24-05788)—both pending in the Southern District of New York.
Broader Implications for Financial Institutions
This decision may offer some reassurance to global financial institutions that have faced similar lawsuits under JASTA in recent years. Courts have repeatedly signaled that plaintiffs must show a clear causal connection between a bank’s alleged financial facilitation and the specific acts of terror being litigated.
The ruling also highlights the continued legal tension surrounding how far liability can extend when banks are accused of indirectly supporting bad actors through financial transactions. While regulators and enforcement agencies continue to penalize institutions for sanctions violations, civil suits seeking damages for terrorism face a high bar for proving liability.
What Comes Next
Lawyers for the plaintiffs have not yet commented on whether they plan to appeal the decision. If an appeal is filed, the case could test the limits of JASTA once more, potentially influencing how future terrorism-related claims against financial institutions are litigated.
For Standard Chartered, the dismissal represents a major legal relief, allowing the bank to focus on its global operations without the overhang of potential multimillion-dollar damages.
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