Christian Sewing, CEO of Deutsche Bank AG, pauses as Germany’s largest bank announces annual results in Frankfurt, Germany, on Friday. February 1, 2019. Deutsche Banks sales shrank for an eighth straight quarter in the closing months of last year, complicating Chief Executive Officer Christian Sewings’ plan to turn the lender around due to cost savings. Photographer: Krisztian Bocsi / Bloomberg via Getty Images
Krisztian Bocsi | Bloomberg | Getty Images
According to a person with direct knowledge of the deal, Deutsche Bank has agreed to pay about $ 125 million to resolve individual US investigations in allegations that it paid bribes to secure business overseas and that it manipulated metal markets.
The bank, a global capital markets player and Germany’s largest lender, entered into a three-year deferred prosecution agreement as part of the settlement, according to a copy of documents filed in federal court in Brooklyn on Friday.
Virtually the entire dollar value of the penalties announced Friday is linked to the allegation that Deutsche Bank employees violated the Foreign Corrupt Practices Act with transactions in China, Abu Dhabi, Saudi Arabia and Italy, the person said, who declined. talk about regulatory issues.
That accounts for about $ 123 million in fines paid to the Justice Department and the Securities and Exchange Commission, the person said. The bank is also paying $ 1.9 million to the DOJ in connection with metal market spoofing, an amount that the bank is giving credit for an earlier settlement with the Commodity Futures Trading Commission.
“Deutsche Bank took part in a criminal scheme to hide payments to so-called consultants around the world who acted as a channel for bribes to foreign officials and others so that they could unfairly obtain and retain lucrative business projects,” said the US attorney. Seth DuCharme in a statement. “This office will remain responsible for financial institutions operating in the United States that engage in practices to facilitate criminal activity in order to increase their bottom line.”
The news is the latest recognition of shoddy controls at Deutsche Bank since the 2008 financial crisis. In 2015, the bank agreed to pay $ 2.5 billion to cover the costs, part of a network of banks that manipulated global Libor interest rates. In 2017, the company agreed to a $ 7.2 billion settlement for its role in creating soured mortgage bonds during the housing bubble.
More recently, Deutsche Bank paid New York authorities $ 150 million in July, and CEO Christian Sewing admitted that his company should never have accepted child sex trafficker Jeffrey Epstein as a customer in 2013.
Deutsche Bank has given bribes and expensive gifts to politically connected individuals in China, according to a 2019 New York Times report.
Bank spokesman Dan Hunter said the company has taken “significant” steps to address the issues, including spending more than $ 1 billion ($ 1.22 billion) on audits and training.
“While we cannot comment on the details of the resolutions, we are taking responsibility for these past actions, which took place between 2008 and 2017,” the bank said. “Our thorough internal investigations and full cooperation with the DOJ and SEC investigations on these matters reflect our transparency and determination to put these matters in the past for good.”
The deal is also the last bank settlement to be announced in the closing days of Trump’s presidency. Deutsche Bank has been Donald Trump’s main lender for the past two decades, and he currently owes the institution more than $ 300 million, the Times reports.