Investment giant sues Standard Chartered Bank for 2.7 billion dollars, accusing the bank of complicity in 1MDB fraudulent activities.
In a significant legal development, liquidators from financial services firm Kroll have filed a lawsuit against Standard Chartered Bank in Singapore, alleging that the bank enabled fraud that led to more than $2.7 billion in financial losses for Malaysia's sovereign wealth fund, 1Malaysia Development Berhad (1MDB).
The lawsuit, which is currently an active legal proceeding, was initiated in 2025. The liquidators accuse Standard Chartered of permitting over 100 intrabank transfers between 2009 and 2013, which helped conceal the flow of stolen funds from 1MDB. These transfers allegedly included business payments and purchases of jewellery and luxury goods for the family of former Malaysian Prime Minister Najib Razak, who has consistently denied wrongdoing.
Standard Chartered has emphatically rejected the allegations, maintaining it complied with reporting and regulatory requirements, shut accounts involved in 2013, and cooperated fully with authorities. However, the bank has not yet been formally served with the legal filing documents.
The Monetary Authority of Singapore (MAS) previously found "significant lapses" in Standard Chartered's customer due diligence measures and controls for ongoing monitoring, but did not find "willful misconduct" during its investigations.
The lawsuit seeks over $2.7 billion in damages and could set a precedent impacting not only Standard Chartered but possibly other financial institutions under the UK's Financial Services and Markets Act. In a related development, a London High Court ruling in May 2025 allowed key claims to proceed toward a trial scheduled for October 2026.
The Board of 1MDB welcomed the court-appointed liquidators' move, and Malaysia has recovered a total of 29 billion ringgit ($6.92 billion) in 1MDB assets between 2019 and February 2024. At least six countries, including Singapore and Switzerland, have launched investigations into 1MDB dealings as part of a global probe.
The potential hit from the lawsuit could weigh on Standard Chartered's shares in the short term, according to Matt Britzman, senior equity analyst at Hargreaves Lansdown. Shares in Standard Chartered fell on Tuesday, with a 2.7% drop by 1110 GMT, against a 0.3% drop in London's FTSE 100.
The lawsuit is the latest in a wide-ranging effort to recover money belonging to 1MDB, from which U.S. investigators say about $4.5 billion was stolen between 2009 and 2014 in a complex, globe-spanning scheme. The case is expected to unfold over the coming months, with both parties presenting their evidence and arguments in court.
- The lawsuit, filed by liquidators from financial services firm Kroll in 2025, alleges that Standard Chartered Bank allowed over 100 intrabank transfers between 2009 and 2013, which helped conceal the flow of stolen funds from 1Malaysia Development Berhad (1MDB).
- The lawsuit seeks over $2.7 billion in damages and could set a precedent impacting not only Standard Chartered but possibly other financial institutions under the UK's Financial Services and Markets Act.
- The Board of 1MDB, Malaysia's sovereign wealth fund, has welcomed the court-appointed liquidators' move to recover stolen funds.
- The lawsuit follows a wide-ranging effort to recover money belonging to 1MDB, with the case unfolding over the coming months, involving both parties presenting their evidence and arguments in court.
