United States financial regulators have imposed a $US258 million ($392m) fine on Deutsche Bank, exposing its deliberate efforts to hide huge worldwide cash transfers by sanctioned customers from scrutiny. Deutsche Bank will pay $200 million of the penalty to NYDFS and the remaining $58 million to the Fed. In addition, Germany’s largest bank will install an independent monitor and fire six employees who were involved in the sanctions-evasion scheme, and bar three other employees from any work involving the company’s U.S. operations.
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The bank used “non-transparent methods” on more than 27,000 dollar-clearing transactions valued at more than $10.8 billion, DFS said.
The bank said in a statement that the conduct had stopped several years ago, adding: “Since then we have terminated all business with parties from the countries involved”.
“For example, a relationship manager who did significant business with Iranian and Syrian customers complained to his boss that colleagues in the Middle East ‘participated in a major conference call with senior management of [Deutsche Bank New York] and provided an overview of DB’s account activities with Syria outside the U.S”.
It’s the latest in a series of hard revelations for the bank. French banking giant BNP Paribas previous year agreed to pay almost $9 billion and plead guilty to criminal charges in a record sanctions settlement.
The transactions involved $US10.86 billion transferred for customers in Iran, Libya, Syria, Sudan and Burma between 1999 and 2006.
It comes two weeks after the DFS announced a $787m (£512m) settlement with France’s Credit Agricole for similar violations.
The transactions in question “have to be treated with caution as…the payment gets released from the queue; there is a probability that the funds will be frozen by the Federal Reserve thereby causing financial and reputation loss for the Bank”.
A Deutsche Bank spokeswoman said it was pleased to reach the resolution.
In October, Mr. Cryan said litigation costs would “continue to be a burden”, but that he hopes the “huge morale blow” brought on by high-profile legal problems will subside as Deutsche Bank resolves its regulatory probes. Shares are down more than 7% on the year and Deutsche Bank brought on a new CEO earlier this year.
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“We are committed to investigating and pursuing sanctions violations and money laundering at financial institutions”, department Superintendent Anthony Albanese said.
