More scandals at a European bank, can’t be! JK.
Deutsche Bank, the German banking giant, is the latest to settle with state and federal banking regulators over its dealings with Iran and Syria in violation of sanctions.
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Settle with regulators, criminal investigations continue
The settlement involves a payment of $200 million to the New York State Department of Financial Services with an additional $58 million going to the Federal Reserve. The German bank has also agreed to appoint an independent monitor to help ensure that it remains (returns?) to compliance with international sanctions.
While Deutsche Bank has settled with the aforementioned regulators, criminal investigations by the Manhattan district attorney and the United State’s attorney’s office in Manhattan.
Deutsche Bank is just one of a number of large European banking entities that are accused of helping their clients in the United States deal with blacklisted countries through their offices in New York (usually Manhattan). Last month saw Crédit Agricole of France paying $787 million to settle criminal and regulatory investigations. Compared to another French bank, BNP Paribas, Crédit Agricole of France got off easy presumably for less egregious offenses. Paribas in addition to pleading guilty to criminal complaints was fastened with a record $8.9 billion in penalties.
Société Générale and UniCredit have yet to face charges or receive settlement offers as investigations into the two banks dealings with Iran, Syria, South Sudan and others.
Statements from both sides in the Deutsche Bank affair
Deutsche Bank said in a statement today, “We are pleased to have reached a resolution with the New York Department of Financial Services and the Federal Reserve. The conduct ceased several years ago, and since then we have terminated all business with parties from the countries involved.”
“We are committed to investigating and pursuing sanctions violations and money laundering at financial institutions. We are pleased that Deutsche Bank worked with us to resolve this matter and take action against individual employees who engaged in misconduct,” said Anthony J. Albanese, the acting superintendent for the Department of Financial Services in his own statement today.
The nature of its dealings
The fired employees and others found ways to hide 27,200 dollar-clearing transactions estimated to be worth nearly $11 billion for customers in Libya, Myanmar, Sudan and Iran. The actions by the employees occurred from 1999 to 2006, according to regulators and their sneakiness was able to keep internal red flags from being raised at Deutsche Bank. At least according to Deutsche Bank.
Regulators had a wealth of emails from the employees uncovered during the investigation including one which read, “Let’s keep this email strictly on a “need-know’ basis, no need to spread the news.”
The number of fired employees (six) would have been much greater had a number of those involved not already left the bank. In addition to the six fired employees, three will stay on with Deutsch Bank but will be barred from the bank’s American operations.