Christian Sewing, chief executive of Deutsche Bank AG, pauses while Germany’s largest bank announces profits for the year in Frankfurt, Germany, on Friday. February 1, 2019. Deutsche Banks ‘revenue contracted for the eighth consecutive quarter in the final months of last year, complicating CEO Christian Sewings’ plan to reverse the creditor through cost cuts. Photographer: Krisztian Bocsi / Bloomberg via Getty Images
Krisztian Bocsi | Bloomberg | Getty Images
Deutsche Bank has agreed to pay about $ 125 million to settle separate investigations in the U.S. on allegations that it paid bribes to secure business abroad and that it manipulated the metals markets, according to a person with direct knowledge of the business.
The bank, a global capital market player and Germany’s largest creditor, has signed a three-year deferred prosecution agreement as part of the agreement, according to a copy of documents filed on Friday in federal court in Brooklyn.
Almost the entire dollar value of the punishments to be announced on Friday is linked to the allegation that Deutsche Bank employees violated the Foreign Corrupt Practices Act with business in China, Abu Dhabi, Saudi Arabia and Italy, according to the person , who declined to be identified talking about regulatory issues.
That represents about $ 123 million in fines paid to the Department of Justice and the Securities and Exchange Commission, the person said. The bank is also paying $ 1.9 million to DOJ linked to spoofing in the metal markets, an amount that gives the bank credit for a prior agreement with the Commodity Futures Trading Commission.
“Deutsche Bank was involved in a criminal scheme to hide payments from so-called consultants around the world that served as bribery channels to foreign officials and others so that they could unfairly obtain and retain profitable business projects,” said the acting attorney. of the United States Seth DuCharme in a statement. “This office will continue to hold responsible financial institutions that operate in the United States and engage in practices to facilitate criminal activity in order to increase its financial results.”
The news is the latest recognition of inadequate controls at Deutsche Bank since the 2008 financial crisis. In 2015, the bank agreed to pay $ 2.5 billion to settle charges that were part of a network of banks that manipulated the exchange rate. global Libor interest. In 2017, the company agreed to a $ 7.2 billion deal for its role in creating deteriorated mortgage bonds during the housing bubble.
Most recently, Deutsche Bank paid the New York authorities $ 150 million in July and CEO Christian Sewing acknowledged that his company should never have accepted child sex trafficker Jeffrey Epstein as a client in 2013.
Deutsche Bank offered 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 had taken “significant” steps to address the problems, including spending more than € 1 billion ($ 1.22 billion) on controls and training.
“Although we cannot comment on the details of the resolutions, we assume responsibility for these past actions, which took place between 2008 and 2017,” said the bank. “Our thorough internal investigations and full cooperation with DOJ and SEC investigations on these matters reflect our transparency and determination to leave these matters firmly in the past.”
The deal is also the last bank agreement to be announced in the last days of Trump’s presidency. Deutsche Bank has been Donald Trump’s main creditor for the past two decades and he currently owes the institution more than $ 300 million, the Times reported.