Deutsche Bank Fined $630m Over Russia Money Laundering Claims

The Guardian |  January 31, 2017        Deutsche Bank has been fined more than $630m (£506m) for failing to prevent $10bn of Russian money laundering and exposing the UK financial system to the risk of financial crime.

The UK’s Financial Conduct Authority imposed its largest ever fine – £163m – for potential money laundering offences on Germany’s biggest bank, which it said had missed several opportunities to clamp down on the activities of its Russian operations as a result of weak systems to detect financial crime between 2012 and 2015.

A US regulator, the New York Department of Financial Services (DFS), also fined the bank $425m as it listed problems at Deutsche including one senior compliance officer stating he had to “beg, borrow, and steal” to get the resources to combat money laundering. As part of the settlement, the DFS has imposed a monitor, who will police the behaviour inside the bank for two years.

The latest run-in with regulators comes as Deutsche’s chief executive, John Cryan, tries to clean up the bank. Last month it paid $7.2bn to settle a decade-old toxic bond mis-selling scandal with the US Department of Justice.  Read more here.

Deutsche Bank and Justice Dept. Complete Deal on Mortgage Crisis

The New York Times |  January 17, 2017        The Justice Department completed a deal with Deutsche Bank on Tuesday that will require the bank to pay $7.2 billion for its sale of toxic mortgage securities in the run-up to the 2008 financial crisis, the department said.

The settlement calls on Deutsche Bank to pay a civil penalty of $3.1 billion and provide $4.1 billion in consumer relief to homeowners, borrowers and communities harmed by its practices.

The total is the largest amount ever paid to resolve charges against a single entity for misleading investors in residential mortgage-backed securities, the department said in a statement.  Read more here.

Deutsche Bank to Fight $14 Billion Demand From U.S. Authorities

Deutsche Bank shares tumble on U.S. fine

Reuters | September 16, 2016         Deutsche Bank (DBKGn.DE) said it would fight a $14 billion demand from the U.S. Department of Justice to settle claims it missold mortgage-backed securities, a shock bill that raises questions about the future of Germany's largest lender.

The claim against Deutsche, which is likely to trigger several months of talks, far exceeds the bank's expectations that the DoJ would be looking for a figure of only up to 3 billion euros ($3.4 billion).

The demand adds to the problems facing Deutsche Bank's Chief Executive John Cryan, a Briton who has been in the job for a year.

The bank only scraped through European stress tests in July and has warned it may need deeper cost cuts to turn itself around after revenue fell sharply in the second quarter due to challenging markets and low interest rates.

Deutsche Bank shares, which have lost around half their value this year, tumbled 7.6 percent to 12.10 euros in Frankfurt on Friday, with analysts saying the bank may need to raise fresh funds from investors or sell assets to shore up its capital ratios.

The cost of insuring Deutsche Bank debt against default rose by around eight percent.

The bank, which employs around 100,000 people, said it regarded the DoJ demand as an opening shot.

"Deutsche Bank has no intent to settle these potential civil claims anywhere near the number cited," it said in a statement.

"The negotiations are only just beginning. The bank expects that they will lead to an outcome similar to those of peer banks which have settled at materially lower amounts."  Read more here.

Deutsche Bank Must Face U.S. Lawsuit Over $3.1 Billion Mortgage Loss: Judge

Reuters Business Insider | February 3, 2016     Deutsche Bank AG must face a U.S. lawsuit seeking to hold it liable for causing $3.1 billion of investor losses by failing to properly monitor 10 trusts backed by toxic residential mortgages, a federal judge ruled on Wednesday.

U.S. District Judge Alison Nathan in Manhattan said Belgium's Royal Park Investments SA/NV may pursue claims that the trustee Deutsche Bank National Trust Co ignored "widespread" deficiencies in how the underlying loans were underwritten and serviced, and failed to require that bad loans be repurchased.

Royal Park, which is seeking class-action status on behalf of other investors, said Deutsche Bank breached its fiduciary duties in part out of fear it might lose business or prompt retaliation over the German bank's own problem loans.

"Plaintiff's allegations of high default rates, large economic losses, and widespread investigation into RMBS securitization allow the court to draw the reasonable inference that defendant had actual knowledge" of defective loans, the judge wrote.  Read more here