Conflicts of interest are endemic to professional life. How professionals deal with them is what makes them professionals. But that’s just the beginning of a story that has banking circles in New York buzzing. The episode suggests just how much bank bashing has become a fiscal racket.

Did a prominent, politically connected advisory firm, Promontory Financial Group, go easy on its client bank, Britain’s Standard Chartered? Promontory had been hired by the bank’s outside lawyers to help comply with an Iran sanctions-busting...