The US Treasury on Wednesday confirmed a probe into Standard Chartered and defended its Iran sanctions regime following the New York regulator\'s damaging accusations against the British bank. Adam Szubin, director of the US Treasury\'s Office of Foreign Assets Control, told a British counterpart in a letter that his office \"is investigating the bank for potential Iran-related violations as well as a broader set of potential sanctions violations.\" The letter, obtained by AFP, gave no further information on the investigation, but defended Washington\'s policy of punishing banks operating in the United States that do business with Iranian banks. \"These cases serve as a powerful deterrent, and we continue to investigate past conduct by offenders. We take sanctions violations by financial institutions extremely seriously,\" Szubin said. Media reports earlier said the Treasury, the Justice Department and the Federal Reserve had actually been caught unaware when the New York Department of Financial Services (DFS) accused Standard Chartered of laundering some $250 billion for Iranian banks in violation of US sanctions on Tehran. And in London, Standard Chartered\'s chief executive Peter Sands lashed out against the charges while British officials raised questions about the US action. \"There are a lot of matters that we don\'t recognize, we don\'t understand and are factually inaccurate,\" Sands told a conference call. He said the bank\'s profits from the transactions amounted to \"tens of millions\" of dollars, not hundreds of millions as DFS had suggested. He added that the episode was \"clearly very damaging. It would be unrealistic to pretend otherwise.\" The bank\'s shares plunged 16.8 percent Tuesday, a day after the DFS charges, but recovered 7.1 percent Wednesday in London trade. British newspapers cited unnamed officials as accusing the United States of trying to undermine the rival British banking industry, after it leveled Iran sanctions charges at other British and European banks this year. Bank of England governor Mervyn King on Wednesday downplayed that view, while criticizing the DFS\'s decision to act while other US regulators were still investigating the bank. \"Overall, I don\'t judge my colleagues or others in the United States as having any such intention\" to undermine British banks, he said. \"All the UK authorities would ask is that the various regulatory bodies that are investigating a particular case try to work together and refrain from making too many public statements until the investigation is completed. \"That seems to me the appropriate time to make clear what the judgment is and what the punishment is.\" The New York Times said that federal agencies had been blindsided by the move Monday by DFS head Benjamin Lawsky. In an order to Standard Chartered to explain its actions, the DFS called it a \"rogue bank\" which had systematically sought to hide its lucrative business of transferring US dollars for Iranian banks between 2001 and 2010. The DFS threatened to remove Standard Chartered\'s New York banking license, which would lock it out of one of the world foremost financial hubs. The Times said federal regulators were upset that Lawsky went ahead without them and that Treasury Department officials believe that many of the Iran-linked transactions, while questionable, \"were not necessarily illegal.\" The newspaper said that both the Justice Department and the Fed were still reviewing the evidence and had not decided on whether to bring charges. Standard Chartered said it has been cooperating with all of the regulators for years on the issue, voluntarily approaching them over the matter and providing extensive documentation of its activities. It said in a statement Monday that only $14 million worth of transactions -- so-called U-turn deals which moved US dollars between clients through its New York dollar clearing unit -- did not follow US rules.