Politics 8 August 2012 StanChart: what's to stop a regulatory body going rogue? Still possible that the New York DFS allegations are untrue. Print HTML Whether true or not, the New York Department of Financial Service's accusations have caused a whole lot of trouble for Standard Chartered, but the key point is that they still may not be true. The accusations are fairly detailed, but are also unbacked by facts, highly unusual for this sort of announcement. The regulatory body will have to prove their allegations are true on August 15, but unfortunately for Stan Chart the markets operate on a "no smoke without fire" basis. The company's shares suffered their steepest one-day decline in several decades on Tuesday, dropping more than 16 per cent.The shares have bounced back slightly since then, but the damage has been done. “This has been incredibly damaging,” analysts at Charles Stanley confirmed in a note. “It is ruining all the good work that [has been] done in recent years.” If the accusations do turn out not to be true, StanChart is still left in pieces. How are regulatory authorities allowed to wreak this sort of havoc? (British MPs have already accused the New York DFS of a motivated attack, in pursuit of an anti-city agenda.) As a spokesperson for the British Banking Authority said: "There really isn't anything that stops a regulatory authority from making accusations." Perhaps reassuringly, every part of this incident points to something quite unusual on the part of the New York DFS. Firstly the announcement itself completely sidesteps normal procedure. Most cases of this kind would first be compiled in full, the evidence fully collected and an opportunity given to the company in question to defend themselves, before an announcement could then be made. The language used by the NY DFS also stands out. "Rogue institution", as they dubbed StanChart, is just one example of the unusually inflammatory phrasing. › "The death of competitive sports" is the right's favourite Straw Bogeyman Standard Chartered. Photograph: Getty Images Martha Gill writes the weekly Irrational Animals column. You can follow her on Twitter here: @Martha_Gill. Subscribe More Related articles For 19 minutes, I thought I had won the lottery VIDEO: Market outlook from Artemis’ Chief Investment Officer The year of the flop: why could none of the big-money clubs come close to Leicester City?