According to an April 9th article in the New York Times, global regulatory authorities are approaching an agreement with Deutsche Bank calling for a record penalty and a guilty plea to a fraud charge for the division that initiated the criminal activity.
The NYT sources note that Deutsche Bank is looking at a $1.5 billion total penalty for manipulating the Libor rate. Analysts note this would be the largest fine so far on a bank involved in the LIBOR rate-rigging scandal.
More on emerging Deutsche Bank Libor settlement
The sources noted that Germany’s biggest bank is in advanced talks to settle the case, perhaps by the end of April. When the deal is finalized (the negotiations involve federal prosecutors as well as New York’s financial regulator and financial regulators in London and Washington), it will be among the last cases relating to the investigation into the London interbank offered rate (LIBOR).
Deutsche Bank’s planned settlement, at least as described so far by the inside sources familiar with the negotiations, reflects the fact they kept putting off a settlement. It appears that regulatory authorities will collect more than $1.5 billion from Deutsche Bank in a penalty, far surpassing all earlier settlements with other institutions involved in the LIBOR scandal. Of note, the U.S. Justice Department is also insisting that one of the bank’s British subsidiaries’ plead guilty to fraud, which would represent the first major banking unit to agree to a criminal plea in the LIBOR investigation.
Statement from Deutsche Bank
Deutsche Bank commented in a recent statement that, “We continue to work with the authorities that are reviewing interbank offered rates matters.”
In earlier statements, the German mega-bank has said it has “undertaken significant measures to enhance its systems and controls.” Moreover, according to the sources with knowledge of the matter, DB has terminated more than a dozen employees related to the Libor case.