Deutsche to pay $100m to avoid bribery charges

Bloomberg

Deutsche Bank AG agreed to pay more than $130 million to settle criminal and civil charges that it bribed foreign officials and manipulated the market for precious-metals futures through a trading tactic known as spoofing.
The Frankfurt-based bank agreed to a deal in which it won’t be prosecuted as long as it doesn’t engage in the practices again for more than three years, and wasn’t required to plead guilty to the charges. The case was brought by federal prosecutors in Brooklyn, New York, and Washington who secured a $920 million fine against JPMorgan Chase & Co. last year, the largest sanction ever tied to spoofing.
Big banks have been rushing to conclude legal deals before the change of US administrations, partly out of concern that there may be stiffer fines under a Democratic president. Three top US-based banks agreed to pay more than $4 billion in settlements announced just before the November election, on issues ranging from bribery to market manipulation.
Deutsche Bank’s agreement with the Justice Department was confirmed at a remote hearing in federal court in Brooklyn. The bank will pay $80 million in criminal penalties for violating the Foreign Corrupt Practices Act and another $5.6 million for commodities fraud, though the bank received credit on the latter fine for an earlier settlement with the Commodity Futures Trading Commission.
In addition, Deutsche Bank will pay more than $43 million to the Securities and Exchange Commission to resolve a parallel, civil action against it for the bribery conduct. The SEC investigation found that it lacked adequate internal accounting controls on third-party intermediaries, with $7 million in suspicious payments recorded as legitimate business expenses. Bank employees also falsified invoices and other documents, according to the SEC.
“While we cannot comment on the specifics of the resolutions, we take responsibility for these past actions, which took place between 2008 and 2017,” Deutsche Bank spokesperson Dan Hunter said in a statement. “Our thorough internal investigations, and full cooperation with the DOJ and SEC investigations of these matters, reflect our transparency and determination to put these matters firmly in the past.”
The bank has taken “significant remedial actions,” Hunter said, investing more than 1 billion euros ($1.22 billion) in data, technology and controls, improving its training and boosting its global anti-financial-crime staff to more than 1,600.
Spoofers trick other investors into buying or selling by putting in their own buy or sell orders with no intention of filling them. That creates artificial demand that drives prices up or down. With computerized trading common, the long-frowned-on practice has become a threat to market legitimacy. Spoofing contributed to the flash crash of May 2010, when almost $1 trillion was temporarily wiped out in the U.S. stock market.