(Bloomberg) — The U.S. Treasury Department is examining JPMorgan’s relationship with a hedge fund that is allegedly part of a network overseen by Iranian oil trader Hossein Shamkhani.
The investigation is at an early stage as the agency examines whether the New York-based bank complied with all rules and regulations when it took on Ocean Leonid Investments as a client, according to people familiar with the matter who requested anonymity because the information is not available. are public. The entity was recently suspended by the Dubai financial free zone.
Bloomberg News reported on Oct. 24 about Ocean Leonid’s role as a hedge fund with offices in London, Dubai and Geneva, overseen by Shamkhani. , ABN Amro Bank NV and Marex Group Plc were among the lenders that offered leverage to the company, Bloomberg News reported.
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Spokespeople for JPMorgan, the U.S. Treasury and Ocean Leonid declined to comment. Shamkhani did not respond to a written request for comment sent to his lawyer.
An Ocean Leonid representative previously said in response to Bloomberg News’ investigation that the company categorically rejects the allegation that Shamkhani is involved in or oversees the entity. A lawyer for Shamkhani also previously denied that his client had any relationship with Ocean Leonid.
People familiar with the matter said there was no obligation to terminate the customer relationship because neither Shamkhani nor the company appeared on any sanctions list.
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The US Treasury is primarily interested in Shamkhani’s activities, although the possibility of banking compliance gaps is also a consideration, the sources said. The Federal Reserve is also reviewing Western financial exposure to the Iranian oil trader’s network, they said.
A Fed spokesman declined to comment.
The US requires banks operating in its jurisdiction to screen customers for possible money laundering and terrorist financing practices, as well as alert authorities to suspicious transactions.
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The Treasury Department’s Office of the Comptroller of the Currency and the Fed are among the agencies charged with ensuring that financial institutions have adequate systems in place to meet these obligations.
Hossein Shamkhani’s father, Ali Shamkhani, a top adviser to Iranian Supreme Leader Ayatollah Ali Khamenei, was in January 2020 by the U.S. Treasury’s Office of Foreign Assets Control, which cited his “pivotal role” in defense policies of the Islamic Republic and its assistance in coordinating political, intelligence, social and economic activities in accordance with the directives of the Supreme Leader.
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