Deutsche Bank AG agreed to pay more than $ 130 million to settle criminal and civil charges alleging that it bribed foreign officials and sent futures to precious metals through a trading strategy known as spoofing Manipulated the market for
The Frankfurt-based bank agreed to a settlement in which it would not be prosecuted because it does not engage in re-practices for more than three years, and there is no need to lobby the charges. The case was brought by federal prosecutors in Brooklyn, New York and Washington, who fined him $ 920 million JPMorgan Chase & Co. last year, the biggest clearance associated with spoofing.
Prior to the change of US administrations, large banks have run to end legal deals, partly out of concern that stiff penalties could occur under a Democratic president. Three top US banks agreed to pay more than $ 4 billion in settlements announced just before the November election on issues ranging from bribery to market manipulation.
Deutsche Bank’s agreement with the Department of Justice was confirmed in a remote hearing in federal court in Brooklyn on Friday. The bank will pay $ 80 million in criminal penalties for violating the Foreign Corrupt Practices Act and another $ 5.6 million for commodity fraud, although the bank later received a fine for an earlier settlement with the Commodity Futures Trading Commission.
In addition, Deutsche Bank will pay more than $ 43 million to the Securities and Exchange Commission to resolve a parallel, civil action for the conduct of bribes. The SEC investigation found that there was a lack of adequate internal accounting control over third-party intermediaries with $ 7 million in doubtful payments recorded as legitimate business expenses. Bank employees also mistook invoices and other documents, according to the SEC.
Deutsche Bank spokesman Dan Hunter said in a statement, “While we cannot comment on the specifics of the resolutions, we take responsibility for these past actions, which took place between 2008 and 2017.” “Our thorough internal investigations, and full cooperation in the DOJ and SEC investigations of these cases, reflect our transparency and determination to keep these cases firmly in the past.”
The bank has taken “significant remedial action”, Hunter said, investing more than 1 billion euros ($ 1.22 billion) in data, technology and controls, improving its training and providing its global anti-financial-crime staff with more than 1,600 extent to.
Spoofers sell them with no purpose in order to buy or sell their own to other investors. This creates artificial demand that drives prices up or down. With computerized trading common, long-standing practice has become a threat to market legitimacy. Spoffing contributed to the flash crash of May 2010, when the US stock market was temporarily wiped out by about $ 1 trillion.
QuickTech: spoofing is a silly name for serious market rigging
Traders argue that the crime is much harder to separate from the cancellation of a valid order. Prosecutors would have to prove that the merchants had intended in advance to rescind their orders.
Two Deutsche Bank merchants, Cedric Chanu and James Worley, were convicted in September of manipulating prices for gold and silver contracts. They were charged with filing serious bids for contracts, canceling orders before filling them, and profiteering on price swings in between.
Bribes to ‘Consultants’
In the case’s foreign bribery case, the US says that Deutsche Bank managers agreed to pay millions of dollars to “advisers” for investment managers in Abu Dhabi and Saudi Arabia, who would actually allow the businessman to win the business. Was paying bribe.
In Abu Dhabi, managers provided an investment officer’s yacht as well as a total of $ 3.5 million in cash, helping the bank win $ 35 million in fees.
In Saudi Arabia, the payment was made to an entity controlled by the wife of an investment manager who in turn was overseen by hundreds of millions of dollars in family assets belonging to a Saudi official. More than $ 1 million was paid, including a loan of over 600,000 euros for an asset manager to buy a house in France.
In both cases, senior bank officials were aware of the payment, according to court records.
Deutsche Bank’s legal woes have come from a long downstream of dwindling revenues, stubbornly stable spending, low credit ratings and rising funding costs. The bank has fined more than $ 18 billion for financial misconduct in the decade since the financial crisis.
In July, it agreed to pay $ 150 million to New York’s banking regulator, including a gap of half-a-decade compliance with the financial behaviors of convicted sex offenders Jeffrey Epstein.
German authorities fined 13.5 million euros in October for money laundering violations related to working with it Danske Bank A / S. Frankfurt prosecutors said the bank failed on more than 600 occasions to file timely alerts about suspicious transactions.
The case is US v. Deutsche Bank AG, 20-cr-584, US District Court, Eastern District of New York (Brooklyn).
– assisted by Yalman Onaran
(Updated with details of the agreement in the fourth and fifth paragraphs and with specific sums.)