Hewlett-Packard\'s Deal-Making Missteps

Hewlett-Packard has no problem spending money on deals.

But making money on them? That's the rub.

On Wednesday, the technology giant disclosed that it will have to take an $8 billion charge related to the acquisition of Electronic Data Systems, a $13.9 billion purchase it made four years ago. It's the latest setback for the struggling computer maker which has seen a string acquisitions fall flat.

“We expected a big write-down, but not one this big,” said Peter Misek, a Jeffries analyst. “It just means they overpaid - by a lot.”

Over the past decade, H.P. has aggressively spent on deal-making, paying billions of dollars for businesses like E.D.S., Palm, Compaq and, more recently, Autonomy, the enterprise software company. According to data compiled by Jayson Noland, a Robert W. Baird & Co. analyst, H.P. has spent more than $67 billion on acquisitions since 2001. That's almost double H.P.'s current market value of $38 billion. (See chart below .)

Shares of H.P. gained 2 percent on Wednesday, to close at $19.41.

“They buy at least a company a month, and they have struggled to get this right,” Mr. Noland said. “The small ones have been pretty successful but they've had a hard time integrating the larger ones.”

In recent years, the missteps have been costly ones.

In April 2010, for instance, the computer-maker announced plans to buy Palm, the troubled handset maker, for $1.2 billion. At the time, Todd Bradley, an H.P. executive vice president, praised webOS, Palm's mobile operating system, calling it “innovative” and an “ideal platform for H.P.'s mobile strategy.”

One year later, H.P. announced plans to shutter its webOS device business, amid mounting pressure from rivals like Apple and Google. The reversal cost H.P. $1.7 billion.

“Palm in particular, was one of the most egregiously poor acquisitions,” said Mr. Misek of Jeffries. “It set a new land speed reco rd for destroying shareholder value.”

In the case of E.D.S., H.P. initially found success, by slashing costs and improving margins. The business, which offers consulting services to enterprise clients on a contract basis, is H.P.'s second largest revenue generator next to its computer business. But the services segment has been slow to innovate, according to analysts. Indian rivals, like Tata Consultancy Services and Wipro, have also accepted lower-priced contracts, putting a squeeze on margins. Though rival I.B.M. has not been immune to these industry-shifts, it has focused on higher-margin, strategic consulting services.

H.P. meanwhile, is still playing catch-up in this arena. The company's chief executive, Meg Whitman, has said that the services business will focus on higher-margin contracts going forward.

“They are trying to prune the business of unprofitable contracts and shift it to higher-margin areas of the business that require more expertise,â € Mr. Noland said. “So you're talking about hiring new people, retraining employees and that doesn't happen overnight.”

Analysts are also growing bearish on H.P.'s $10 billion purchase of Autonomy, a British data analytics company that was bought in late 2011. (The deal could be worth up to $11.7 billion, if the company meets certain targets.) The acquisition, which many experts have described as too expensive, has started to sour on H.P.'s vine. On a May earnings call, Ms. Whitman described Autonomy's quarter as “disappointing,” with a “significant decline year over year resulting in a shortfall to our expectations.”

In part, H.P.'s recent M.&A. blunders are linked to its management shuffles, which have whipsawed the company in multiple directions. In the last three years, H.P. has been led by three different chief executives: Mark Hurd, who presided over the Palm and E.D.S. acquisition, but left in late 2010 in the wake of a sexual harassment claim ; Leo Apotheker, who led the $10 billion deal for Autonomy; and Meg Whitman, who reversed Mr. Apotheker's direction, by deciding to keep H.P.'s personal computer business.

So far, Ms. Whitman, the former eBay chief executive, has spent more time on cost-cutting than deal-making. But she is considered a very active dealmaker. During her tenure at the online auction house, she completed 40 acquisitions worth nearly $10 billion.

Then again, H.P.â€" after a long shopping spree - may not have the money to do a lot more. Its cash has dwindled to about $8 billion, from $13 billion in 2009.

“At least shareholders don't have to worry about another large acquisition from H.P.,” Mr. Noland said.

 

AcquisitionValue

Source: Robert W. Baird & Co.
Autonomy	$10 billion
Vertica	$400 million (est.)
Arcsight	$1.5 billion
3PAR	$2.1 billion
Palm	$1.2 billion
3COM	$2.7 billion
IBRIX	undisclosed
Electronic Data Systems	$13.9 billion
EYP MCF	< $100 million
OpsWare	$1.6 billion
NeoWare	$214 million
SPI Dynamics	$86 million
Arteis/Logoworks	$57 million
Tabblo	< $100 million
Bitfone	< $100 million
Bristol Technology	< $100 million
PolyServ	< $100 million
Knightsbridge	$30 million
Mercury Interactive	$4.8 billion
VoodooPC	$32 million
Silverwire	< $63 million
Outerbay	$107 million
Peregrine Systems	$538 million
Sci-tex	$230 million
PIXACO	$27 million
Trustgenix	$10 million
AppIQ	$200 million
RLX Technology	$102 million
Snapfish	$325 million
Synstar	$343 million
Riverstone Networks	undisclosed
IT Infrastructure Mgnt	undisclosed
CEC Europe Service Mgnt	undisclosed
Triaton	$464 million
Digital GlobalSoft	$315 million
TruLogica	undisclosed
Consera	undisclosed
Novadigm	$140 million
Persist	undisclosed
Select Access	undisclosed
Talking Blocks	undisclosed
Extreme Logic	undisclosed
Pipebeach	undisclosed
Intria	$100 million
Compaq Computer	$24.2 billion
Indigo	$719 million
StorageApps	$319 million
Bluestone	$531 million

 

What\'s Next in the Standard Chartered Case

The order issued to Standard Chartered by Benjamin M. Lawsky, the superintendent of the New York State Department of Financial Services, creates a problem for the federal government in its own investigations of the bank. Mr. Lawsky accused the bank of operating “as a rogue institution” in its dealings with Iranian customers in violation of federal law, and seeks to revoke its license to do business in New York.

As DealBook has reported, Mr. Lawsky caught the Federal Reserve and the Justice Department off guard by accusing the bank of misconduct. Now the Fed and Justice have to decide what to do next: Sit back and watch the state proceeding play out, or pursue the case on their own, perhaps working toward a settlement to resolve the entire proceeding.

State regulators usually don't take the lead in cases involving multinational financial institutions, deferring to federal regulators and prosecutors. Whether Mr. Lawsky's charges will prod the federal gove rnment to get moving on its own cases against Standard Chartered remains to be seen, but he is acting within a broad grant of power under New York law to pursue his case.

Section 39 of the New York Banking Law gives the superintendent the power to require any financial institution operating in the state to provide an explanation at a hearing whenever it appears that “it has violated any law or regulation.” The law also gives Mr. Lawsky broad authority to revoke a bank's license if a violation is found.

The statute does not limit the types of violations that can prompt a sanction to only state law. The detailed description of Standard Chartered's possible violations of federal law on reporting transactions involving Iran is listed as one basis for pursuing the case.

Usually a state banking regulator would have limited power to affect the operations of a foreign bank, but New York is in a unique position because of Wall Street. A global operation like S tandard Chartered, which has branches in 70 different countries, arguably has to maintain a branch in New York because of the need to access the financial markets in this country to serve its clients worldwide.

That Wall Street comes within his purview gives Mr. Lawsky the opportunity to have an impact far beyond what other state regulators could have against a global bank with a modest presence in the United States. After all, Standard Chartered has only 940 employees in this country.

Yet revoking the bank's license could deliver a major blow by depriving the bank of access to the financial markets. So while Standard Chartered disputes Mr. Lawsky's accusations, there is intense pressure to reach some type of resolution.

Of course, this is not the first time a New York official has taken the lead on a financial issue before the federal government acted. Former Attorney General Eliot Spitzer took the mantle of “Wall Street's Top Cop” in pursuing cas es involving Wall Street analyst conflicts of interest and American International Group. Going back even further, the office of former Manhattan District Attorney Robert M. Morgenthau took the lead in prosecuting defendants connected to the Bank of Credit and Commerce International, better known as B.C.C.I.

The Federal Reserve and the Justice Department are now in the uncomfortable position of deciding what to do with their investigations. They usually prefer to resolve cases through a negotiated settlement. The recent resolution with Barclays over its manipulation of the Libor, or London interbank offered rate, is a template for the kind of settlement Standard Chartered might have expected: a multimillion dollar financial penalty and modest admission of wrongdoing, but no criminal conviction to affect its operation.

The state case could also jeopardize the federal investigations by causing Standard Charter to end its cooperation if it decides to fight, particu larly if the Justice Department wants to pursue charges against individuals. Federal prosecutors depend on a company's continuing cooperation to furnish the evidence needed to determine whether any employees should be a focus, but once the bank gets dragged into a proceeding, the incentive to cooperate further will be significantly diminished.

The order sets an aggressive schedule by calling for a hearing on Aug. 15, only nine days after filing the order. There is a chance Standard Chartered that can get Mr. Lawsky or a state court judge to delay the proceedings to give it more time to put together a defense, which would also allow it to try to work out a resolution. But if it can't slow things down, then the question is how aggressively it should fight the New York regulator if it wants to avoid a hearing that is likely to reveal some embarrassing information.

And even if the different parties want to reach a settlement, figuring out exactly what Standard Ch artered did wrong remains to be seen. Mr. Lawsky claims the violations involving Iranian transfers totaled $250 billion, while the bank claims that only $14 million was improperly reported - needless to say, that is a significant gap that would have to be bridged in any resolution of the case.

Mr. Lawsky's order has certainly upset the apple cart â€" and probably a few summer vacations â€" by pushing the case forward, probably well in advance of when the Federal Reserve and Justice Department wanted to move. Now that he has acted, the question is probably when, not if, the federal government will take action against Standard Chartered.

Kindler, Former Pfizer Chief, Joins Lux Capital

Jeffrey B. Kindler, who retired as Pfizer‘s chairman and chief executive at the end of 2011, has joined Lux Capital as a venture partner, the firm announced on Wednesday.

The hiring marks Mr. Kindler's most prominent business appointment since his contentious departure from Pfizer. He became the pharmaceutical giant's chief in 2006, having joined four years before from McDonald's as general counsel.

His signature achievement was orchestrating the $68 billion takeover of Wyeth in 2009, kicking off a huge wave of health care mergers by drug makers looking to replenish depleted product pipelines. However, he was all but forced out amid a flare-up in tensions at the company over his management style and his inability to revive a flagging stock price.

At Lux, Mr. Kindler will again be called upon for his deal-making skills, helping to find new health care investments and working with existing portfolio companies. The firm has already invested in the likes of Cerulean Pharma and Kala Pharmaceuticals.

“With tremendous leadership experience in the healthcare industry, Jeff has an appreciation for the intersection of novel science, product development and commercial transactions,” Robert Paull, a co-founder and managing partner at Lux, said in a statement. “As Lux continues to make new investments at the cutting edge of healthcare and as our life sciences portfolio matures, Jeff will prove to be an invaluable resource.”

Mr. Kindler said in his own statement: “I have great respect for the work Lux Capital is doing to build and back companies addressing some of healthcare's biggest challenges.”

Besides his new post at Lux, Mr. Kindler works as a senior adviser to Paragon Pharmaceuticals and as a director at Starboard Capital Partners, a private equity firm.

A Critical Design Change for a Bag to Carry Your Tech Stuff

A few months back, I wrote about what tech stuff I own - and what I carry it in. I noted that I had a Timbuk2 messenger bag. It's a Transportation Security Administration-approved model that unzips to open like a butterfly's wings, so that the laptop compartment can lie flat for airport scanning.

“I originally raved about this bag,” I wrote. “But with wear, I've found that it's become side-heavy. And the laptop compartment has lost its shape, meaning it takes two hands to slip the laptop inside. It might be time to move on.”

That remark set off a surprisingly voluminous response. Many readers wrote to suggest laptop bags that they loved. But I also got this note from a reader:

Timbuk2 has a new laptop bag that is much nicer than the commute bag you've been carrying. Try the Command Messenger (2012) bag ($130 and up). The zip-out T.S.A. flap is improved over the previous model and even has a slot for an iPad or Kindle. There's a “power brick” pocket on the bottom, a nice organizer inside, and a “Napoleon pocket” under the flap that you can access from the side, without opening the flap, which I find perfect for stashing my wallet, keys and phone when going through security at the airport.

Ordinarily, one mention of laptop bags a year should be plenty for my blog. But one aspect of this Command Messenger bag is so brilliant, it's worth a shout-out. On most T.S.A.-compliant, butterfly-style bags (including Timbuk2's other models), the laptop compartment is hinged at the bottom of the bag. As you stand in the security line, you unzip the compartment from the top, and the bag falls open like a book.

There are two problems with that approach. First, the zippers that close the laptop compartment are also at the top, making them easy to mix up with the compartment-splitting zippers.

Second, if you don't carefully and completely rezip the laptop p ocket's zipper after the X-ray, gravity does its unfortunate thing. The compartment, hinged on the bottom, flops open, and your laptop crashes to the floor. I've done it twice. My last laptop had dual bashed-in corners.

On this Command bag, though, the laptop pocket is hinged at the top. When it's lying on the belt, butterflied, the interior is face down now, rather than face up.

That change makes all the difference. Once through the X-ray, you just grab the thing off the belt by the center handle (see my photos). The laptop compartment flops harmlessly closed, even if you're in a hurry for your flight. Gravity is now your friend, not your enemy. You can always zip it later, at the gate or whenever. (Even that is easier this way. You're pulling the zippers down against the force of the shoulder strap as you wear it.)

Finally, this design change means that the laptop compartment is, in effect, hanging most of the time, rather than being supported from the bo ttom. It therefore keeps its shape better, and remains accessible with one hand.

The bag is also great for the reasons my reader mentioned; there's even a video tour here. But putting the hinge at the top makes all the difference. All hail people who think outside the bag!

New York Times Co. Nears Deal to Sell About.com

By CHRISTINE HAUGHNEY

11:37 a.m. | Updated The New York Times Company is in the process of selling the online resource guide About.com, according to an executive familiar with the negotiations.

The company has a letter of intent to sell the About Group, the unit that includes About.com, to Answers.com, a question-and-answer site, for $270 million, the executive said. It's unclear when the deal will close because financing has not yet been secured. The sale was first reported on the Web site AllThingsD.

Last month, the Times Company took a $194.7 million write-down of About.com. The company purchased the Web site in 2005 for just over $400 million. In its latest earnings news release, the company said revenues for the About Group declined 8.7 percent to $25.4 million, largely because of a drop in display and cost-per-click advertising.

The prospective sale of About.com follows a string of sales that The New York Times Company has been making. The company sold its stakes in the Fenway Sports Group, owner of the Boston Red Sox. It took a major write-down last year on its Regional Media Group before selling the newspaper group to Halifax Media Holdings in January for $143 million.

A spokesman for the Times Company, Robert H. Christie, said, “It is the policy of the company not to comment on rumors of potential acquisitions and divestitures.”

Starbucks Invests $25 Million in Square, Schultz Joins Board

SAN FRANCISCO - Cash moved one small step nearer to its deathbed with the announcement on Wednesday that Square, the mobile payments start-up, would form a partnership with the Coffee Company.

This fall, Square will begin processing all credit and debit card transactions at Starbucks stores in the United States and eventually customers will be able to order a grande vanilla latte and charge it to their credit cards simply by saying their names.

Though smartphone payments have a long way to go before they replace wallets altogether, Starbucks's adoption of Square will catapult the start-up's technology onto street corners nationwide, and is the clearest sign yet that mobile payments could become mainstream.

“Anyone who's going to break the mobile payments barrier in the U.S. has to overcome the resistance to try anything new when everything we have works really, really well, even cash, which is very convenient,” said Bill Maurer, director of the Institute for Money, Technology and Financial Inclusion at the University of California, Irvine.

“But if a big merchant jumping into some mobile payment solution signals to other merchants that there is an opportunity here,” he added, “that might change the psychology for other merchants.”

Starbucks is also investing $25 million in Square as part of its latest round of financing, which values the company at $3.25 billion, and Howard D. Schultz, Starbucks's chief executive, will join Square's board.

Starbucks has offered its own mobile payment app since last year and processes more than a million mobile payments a week. Customers will continue to be able to use it, but they will also be able to use Pay With Square, Square's cellphone app, which eliminates even having to take the phone out of your pocket or sign a receipt.

At first, Starbucks customers will need to show the merchant a bar code on their phones. But when Starbucks uses Square's full GPS technology, the customer's phone will automatically notify the store that the customer has entered, and the customer's name and photo will pop up on the cashier's screen. The customer will give the merchant his or her name, Starbucks will match the photo and the payment will be complete.

Even though Square's app has been well reviewed, it has not caught on with shoppers, which has been Square's biggest challenge as it tries to expand. That is in large part because of the limited number of merchants that accept payments that way. Most of Square's users are small businesses, like farm stands or cafes that also use Square's credit card reader.

Starbucks, which will be far and away the largest business using Square, could change that.

“Starbucks is one of the largest organizations in the world, taking technology like Square - simple, fast and focused on customer experience - and bringing it to a massive scale,” said Jack Dorsey, Square's co-founder and chief executive.

Square, which was introduced in 2010, is one of many businesses - like Google, PayPal, Sprint and Microsoft and start-ups like Scvngr and GoPago - that are trying to offer mobile payments. But they have been slow to catch on because they require the cooperation of many players, including retailers, credit card companies, banks, cellphone carriers and phone makers. And Americans have been just as happy to pull out their credit cards as their cellphones to make a payment.

Denee Carrington, a Forrester analyst who recently wrote a report on mobile payments, said that mobile payment providers would need to offer a compelling, safe and convenient experience for shoppers, and that the applications would have to make good use of their personal data, like spending habits, to offer valuable services.

Forrester estimates that 30 percent of American mobile phone owners are interested in using mobile payments, based on a survey polling about 7,600 adults in the United States. It found that younger consumers are the most amenable to using mobile wallets. Still, it predicts that it will take another three to five years before mobile payments reach critical mass in the domestic market.

“We are still in the early days of mobile payments specifically, but the market is accelerating, especially the amount of innovation that's happening in the marketplace,” Ms. Carrington said.

Square has so far been most popular in small coffee shops, but Mr. Dorsey and Mr. Schultz said that even though the start-up was now doing business with the nation's biggest coffee chain, the partnership would benefit those small businesses. More customers will have the app, they said, and it will show small businesses near Starbucks stores.

“My hope is that by creating a national footprint for Square technology in all Starbucks stores in the U.S., that it will be a catalyst for Square to get access to tens of thousands of other small business and democratize payments,” Mr. Schultz said.

Liberty Media to Split Off Starz

If merging and splitting up businesses were an Olympic sport, media mogul John C. Malone‘s empire would win gold.

In the latest restructuring twist, Liberty Media and the premium cable business Starz will split, leaving Starz as a separate publicly traded company. Liberty Media announced on Wednesday that its businesses, assets and liabilities - minus those of Starz - would be put in a new company whose shares would be distributed to Liberty Media shareholders. Starz, with about $1.5 billion in debt and an undetermined amount of cash, will become a separate company.

“This transaction will provide better transparency on the Starz operating business; optimize the Starz capital structure; permit us to better pursue our strategic objectives, including creating two currencies that could be used for acquisitions; and create significant liquidity at Liberty Media, which preserves all our options with respect to SiriusXM and Live Nation,” Greg Maffei, pres ident and chief executive of Liberty, said in a statement.

The spin-off is intended to be tax-free to stockholders of Liberty Media and will not require a shareholder vote, the company said. It is expected to take place later this year.

“I believe this stand-alone structure is the first step to unlocking the real potential growth opportunities for our businesses,” said Chris Albrecht, chief executive of Starz.

“Boss” and “Spartacus” are Starz cable shows. The Starz cable service had 20.7 million subscribers at the end of its second quarter while its sister Encore had 34.2 million subscribers.

The business recorded $403 million in revenue for the quarter, unchanged from a year ago, and operating income of $100 million, down from $112 million in the quarter a year ago.

Mr. Malone's companies have used mergers, spinoffs and tracking stocks over the years to improve focus and efficiency and to obtain tax benefits - and make them more a ttractive to sharehoders.

In September, Liberty split off its video and online businesses including QVC and Bodybuilding.com into Liberty Interactive. In addition to Starz, Liberty Media owns the Atlanta Braves baseball team, holds interests in SiriusXM and Live Nation and a big stake in Barnes & Noble. Starz had been a Liberty Media tracking stock until November.

Richard Greenfield, an analyst with BTIG Research, said in a note in November that he expected that “Liberty is preparing to hard-spin Liberty Starz out of Liberty Media, to enable it to be acquired mid-late next year by a larger media entity. ”

Carlyle Swings to a Loss in 2nd Quarter

The Carlyle Group swung to a loss in its second quarter, the firm said on Wednesday, as it struggled to show growth in its core private equity investments.

The firm's loss of $57 million was reported as economic net income, a metric preferred by other publicly traded private equity firms like the Blackstone Group and Kohlberg Kravis Roberts. The figure includes unrealized gains for investments.

That amounts to a loss of about 19 cents a share, surpassing the 14 cents a share average estimate of analysts surveyed by Standard & Poor's Capital IQ.

A year ago, the firm reported $237 million in economic net income.

Carlyle itself emphasizes distributable earnings, which track how much the firm doles out to its investors. It paid out $115 million during the quarter, up 29 percent from the same time a year ago.

Using generally accepted accounting principles, Carlyle lost $10 million for the quarter.

Like many of its counterparts, the firm said that the continuing shakiness of the global markets hampered its ability to do deals as well as slightly eroded the value of its private equity investments.

But Carlyle also pointed to the $3 billion in realized gains that it generated during the quarter as a sign that it was continuing to create value for its limited partners. And it said that it raised nearly $4 billion in new capital for the quarter.

“Our firm, portfolio and funds are in very good shape, despite a quarter marked by significant volatility in global equity markets and continued uncertainty in Europe,” David M. Rubenstein, a co-chief executive of the firm, said in a statement.

The earnings report is the second since the firm went public in May.

Iran Accusations Against Bank Surprised Regulators, Too

Top executives at Standard Chartered said they were surprised when New York's banking regulator accused them on Monday of scheming with the Iranian government to launder billions of dollars to potentially support terrorist activities.

They were not the only ones caught off guard.

The regulatory order also stunned other authorities investigating the bank, namely officials at the Federal Reserve and the Justice Department, according to several people close to the case.

The agencies involved, including the Treasury Department, are debating just how expansive the suspected wrongdoing was at Standard Chartered. Benjamin M. Lawsky, a former prosecutor who now leads the state banking regulator, claimed the bank had processed $250 billion in tainted money while cloaking the identities of its Iranian clients by stripping their names from paperwork. Some federal authorities, though, believe that the amount is much smaller, perhaps in the millions. Standard Chartere d, for its part, said that only $14 million did not comply with regulations.

The wide disparity stems from different interpretations of how many Standard Chartered transactions violated a federal rule that governs the way money from abroad moves through the American financial system.

Before 2008, the rule did not require foreign banks to disclose much detail to their American subsidiaries as long as the banks overseas thoroughly vetted the transactions to detect suspicious activity. Since 2008, though, all transactions with Iran and other sanctioned countries, are banned.

Standard Chartered maintains that “99.9 percent” of the transactions under scrutiny complied with that rule and involved legitimate Iranian banks and corporations. Further, the bank argued that it had examined the transactions and found that they had nothing to do with terrorist activities.

Some Treasury Department officials, while still reviewing the transactions, suspect that M r. Lawsky has taken too broad a view, according to people briefed on the matter. The officials think that some of the transactions, though perhaps questionable, were not necessarily illegal.

However, Mr. Lawsky said that Standard Chartered's deliberate efforts to mask the identity of its clients points to wrongdoing and further suggests that the bank had not fully scrutinized the transactions. One Iranian client, for example, was told to use “NO NAME GIVEN” in paperwork to transfer money, according to an order Mr. Lawsky sent to the bank on Monday outlining the apparent violations of law. That way, the money transfer could escape scrutiny and “not appear to N.Y. to have come from an Iranian bank,” said a 2003 e-mail from a Standard Chartered official cited in the order.

The Fed, which has been investigating the bank since 2010, still is not sure how vast the scheme was. For that reason, it has not yet pursued an action, according to people briefed on the matter who spoke anonymously because the investigation was not public. Similarly, the Justice Department is still determining whether to bring a criminal case.

Before Monday, these authorities were not expecting Mr. Lawsky to act. In money laundering cases, authorities almost always move in concert. Mr. Lawsky's order against Standard Chartered irked many of the other regulators, who questioned whether he had moved too quickly.

Some people close to the case note that Fed officials had been investigating Standard Chartered since 2010 - a year before Mr. Lawsky's Department of Financial Services was created by merging the existing state banking and insurance departments.

Standard Chartered, in a statement rejecting Mr. Lawsky's claims, said that it “voluntarily approached” agencies in 2010 including the Department of Financial Services, the Justice Department, the Federal Reserve Bank of New York and the New York district attorney, and that it is engaged in discussions with them.

“Resolution of such matters normally proceeds through a co-ordinated approach by such agencies,” the bank said, adding that it “was therefore surprised to receive the order from the DFS, given that discussions with the agencies were ongoing.”

“It seems like it's grandstanding,” said Richard L. Scheff, a white-collar lawyer and the chairman of the law firm Montgomery, McCracken, Walker & Rhoads. “There's little benefit of approaching things in that way,” and “you'd want the enforcement community to be working cooperatively.”

Some, however, have praised Mr. Lawsky's aggressiveness in this case and others as a refreshing change from the days when cozy regulators had a soft touch with Wall Street. He has drawn comparisons to other hard-charging New York prosecutors, notably Eliot Spitzer and Andrew M. Cuomo.

“Ben Lawsky wouldn't take a job where it wasn't expected of him to move quickly, make changes and be a force,” said Steven Cohen, a lawyer with Zuckerman Spaeder, who worked with Mr. Lawsky at the attorney general's office under Mr. Cuomo, now the governor of New York. Neil M. Barofsky, the former inspector general for the Treasury's bank bailout fund, lauded Mr. Lawsky's speed in contrast to what he called the “passivity of federal regulators.”

Mr. Lawsky, who vowed to shake up the banking establishment when Mr. Cuomo appointed him in 2011, is unapologetic.

“The very serious and indisputable conduct described in the order speaks for itself,” David Neustadt, a spokesman for Mr. Lawsky said. “We have and will continue to work with our state, local and federal partners.”

As main deputy to Mr. Cuomo, Mr. Lawsky helped bring many headline-grabbing cases against big names like Bank of America and Ernst & Young.

In 2011, shortly after taking the reins of the newly minted banking regulator, Mr. Lawsky set his sights on Standard Chartered.

< p>He met with New York Fed officials, who turned over a battery of e-mails and other internal bank documents that detailed the scheme, according to people briefed on the matter. The documents outlined projects with code names like “Project Gazelle,” money flowing to Iran's central bank, United States executives warning of “criminal liability,” and a manual that told employees how to hide the wave of questionable transactions.

Senior executives at the bank, the order said, also quashed internal complaints. In 2006, according to the order, the bank's chief executive for the Americas warned his superiors that the illicit activity with some Iranian companies had “the potential to cause very serious or even catastrophic reputational damage to the group.”

In response, another executive asked: “Who are you to tell us, the rest of the world, that we're not going to deal with Iranians.”

After reviewing some of the documents, Mr. Lawsky's office regul arly checked in with the New York Fed as the regulator further examined the extent of potential wrongdoing at Standard Chartered.

In a meeting this April, some of Mr. Lawsky's deputies told New York Fed officials that they were going to move forward, according to a person who attended the meeting. Another person familiar with the meeting, however, said that the scope and timing of his actions were not clearly communicated.

On Sunday, Mr. Lawsky informed Cyrus R. Vance Jr., the Manhattan district attorney who is also investigating the bank, according to a person with knowledge of the matter.

It was not until Monday morning that Mr. Lawsky's office informed federal officials, some of whom were disappointed with the late notice, according to people briefed on the matter.

The order outlined nearly a decade of wrongdoing that, Mr. Lawsky said Monday, “left the U.S. financial system vulnerable to terrorists, weapons dealers, drug kingpins and corrupt regi mes, and deprived law enforcement investigators of crucial information used to track all manner of criminal activity.“

Greenberg Asks: Was That Sandy Weill, or Sacha Baron Cohen?

Sanford I. Weill's call to break up big banks certainly took many on Wall Street by surprise. But it was such a major turnabout that at least one longtime banking grandee thinks it's unbelievable.

Alan C. Greenberg, the former chief of Bear Stearns, told Bloomberg Television in an interview on Tuesday that the Mr. Weill he knew would never make that kind of remark. Instead, he intoned, the onetime banking titan may have actually been impersonated by a certain guerrilla comedian.

From the interview:

“It wasn't Sandy Weill. It was that guy Sacha Barry Cohen, or whatever his name is. … Yeah, he was impersonating Sandy.”

“That was not Sandy. I know Sandy. I think it was a guy making a movie about Wall Street or something, that's my guess.”

Mr. Greenberg - Ace, to his friends - went on to add that while it's possible that the man who created Citigroup had undergone a Damascene conversion, it's something of a moot point. “That egg has been scrambled, so we can quit talking about it,” he said.