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Standard Chartered's Penalty Not Severe Enough: Fmr. Ambassador

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Minutes after New York State’s Department of Financial Services announced a $340 million settlement with British bank Standard Chartered for doing business in Iran, the main lobby group pushing for increased sanctions against anyone doing business with the Islamic Republic issued a statement of its own on Tuesday.

Former U.S. Ambassador to the United Nations Mark Wallace, CEO of United Against a Nuclear Iran, said “given the reports of Standard Chartered’s egregious actions the penalty should have been more severe.” (Read More: .)

Benjamin Lawsky, the head of New York’s Department of Financial Services accused Standard Chartered of conducting “60,000 secret transactions, involving at least $250 billion and reaping millions of dollars in fees” from its Iranian business ties. The New York DFS also said executives at Standard Chartered lied to them about their dealings with Iran.

Should Standard Chartered Lose Its NY License?

Before the Department of Financial Services announced the settlement Wallace appeared on CNBC's "Power Lunch."

“This is no time for a slap on the wrist," he said. "We think they should get the equivalent of the financial death penalty — meaning losing their license to do business in the United States and New York.”

Wallace and his group are calling for a “complete and total economic blockade of Iran.”

Standard Chartered’s records indicate the bank had operating income of $17 billion dollars in 2011. Critics of settlements with other banks and businesses in similar cases claim millions in fines for companies making billions of dollars isn’t the right message to send. 

Many members of congress and in the diplomatic community have been arguing companies like Standard Chartered should be forced to make a choice: Do business in the United States or in Iran, but not in both.

It’s still unclear if Standard Chartered will have to deal with federal consequences as well. 

—By CNBC's Jason Gewirtz