Millions settlement closed: Deutsche Bank clears US legacy issues aside

Saturday, January 09, 2021

Millions settlement closed
Deutsche Bank clears US legacy issues aside

Legal trouble in the US is almost part of everyday life for Deutsche Bank. There have been a number of penalties and settlements in recent years. Another legal building site is now being closed, dealing with allegations of corruption and market manipulation.

Deutsche Bank clears other legal legacies in the USA with multi-million dollar comparisons. The largest German financial institution pays around 130 million dollars (106 million euros) in a compromise with the Justice Department and the SEC on allegations of bribery in certain foreign transactions and manipulation in trading with precious metal contracts, as the ministry announced in Washington. In return, criminal proceedings are suspended.

Due to a lack of internal controls, Deutsche Bank allowed its bookkeeping to be tweaked for seven years to cover up bribes and other improper cash flows, the Justice Department said. In addition, traders have tried over a period of five years to fraudulently manipulate the US financial markets.

"Even if we cannot comment on the details of the comparisons, we take responsibility for these events that occurred between 2008 and 2017," Deutsche Bank said in a statement. The affairs had been thoroughly investigated and the company had fully cooperated with the Justice Department and the SEC. The bank has taken significant measures and spent a lot of money to improve its processes.

The allegations of the US authorities are violations of the anti-corruption law "Foreign Corrupt Practices Act", with which the US can pursue allegations of bribery beyond its own national borders. Specifically, a bribe deal in 2010 is mentioned in the court files, in which business advantages in Abu Dhabi were to be obtained through intermediaries. At Deutsche Bank the project was called "Project X" internally.

The second part of the comparison concerns price manipulation by some Deutsche Bank finance professionals in trading precious metal contracts. Among other things, a practice often referred to as "spoofing" is said to have been used, in which purchase orders are only faked on the market in order to manipulate prices. A few months ago, the major US bank JPMorgan Chase was fined $ 920 million by US authorities for similar allegations.