Deutsche Bank has reached a settlement with US authorities over billions of dollars in suspicious deals by its clients in Russia, with the bank now required to pay a $425mn penalty, New York's Department of Financial Services said on January 30.
US and UK authorities have since 2016 been investigating allegations that the bank helped Russian clients to disguise trades from 2011 through 2014, including those referred to as "mirror trades", totalling as much as $10bn in suspect transactions.
"This Russian mirror-trading scheme occurred while the bank was on clear notice of serious and widespread compliance issues dating back a decade,” according to a written statement by DFS Superintendent Maria Vullo.
"The offsetting trades here lacked economic purpose and could have been used to facilitate money laundering or enable other illicit conduct, and today's action sends a clear message that DFS will not tolerate such conduct," Vullo added upon enforcing the largest fine she has imposed since taking office a year ago.
The New York regulator found that a close relative of a Deutsche Bank supervisor in Moscow received bribes worth $0.25mn to clear the trades, according to Bloomberg.
Deutsche Bank is expected to reach a similar agreement in the coming days with the UK's Financial Conduct Authority, which will include an additional penalty of "several hundred million dollars", Bloomberg wrote, citing unnamed sources familiar with the matter.
Meanwhile, the highest-profile probe into the case is still in progress, launched by US federal prosecutors leading a criminal investigation on the failure of the bank's internal controls to flag the scheme, other sources said.
Bloomberg also reminds that the Russian trade deal also comes weeks after Deutsche Bank agreed to a $7.2bn civil penalty to resolve a US investigation into its sales of toxic mortgage debt.
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