The Federal Reserve imposed a $186 million fine on Deutsche Bank on Wednesday, saying it moved too slowly to fix problems with the bank’s money-laundering controls that the bank regulator flagged in 2015 and 2017.
In fining the bank, the Fed issued a new order that requires Deutsche “to prioritize completion” of the controls it was supposed to have put in place under the earlier orders.
The central bank said the action was necessary because while the bank had made some progress in putting better controls in place, it remained “exposed to heightened levels of compliance risk” when it came to detecting money laundering or violations of U.S. sanctions.
Deutsche Bank offices in Frankfurt. The Federal Reserve said the bank remained “exposed to heightened levels of compliance risk” in detecting money laundering or violations of U.S. sanctions.
The Federal Reserve imposed a $186 million fine on Deutsche Bank on Wednesday, saying it moved too slowly to fix problems with the bank’s money-laundering controls that the bank regulator flagged in 2015 and 2017.
“Deutsche Bank made insufficient remedial progress” in complying with those orders, which it had consented to, the Fed said in a statement.
In fining the bank, the Fed issued a new order that requires Deutsche “to prioritize completion” of the controls it was supposed to have put in place under the earlier orders.
The central bank said the action was necessary because while the bank had made some progress in putting better controls in place, it remained “exposed to heightened levels of compliance risk” when it came to detecting money laundering or violations of U.S. sanctions.
Deutsche, in a statement, said the action taken by the Fed related to “our historic tardiness in adhering to older enforcement actions and agreements.” But the bank said it had taken steps to enhance its money-laundering controls, including adding employees to its team that cracks down on financial crimes.
Deutsche has a troubled history with regulators and prosecutors. Over the past decade a number of sanctions have been imposed on the bank and it has paid big fines over its failure to crack down on money laundering and over allegations of enabling tax violations, price fixing and foreign bribery. In 2017, the bank reached a $7.2 billion civil settlement with federal prosecutors over its sale of toxic mortgage products in the run-up to the 2008 financial crisis. The bank also paid a $150 million fine to a New York bank regulator in 2020, partly over its banking relationship with the disgraced financier Jeffrey Epstein.
The Fed orders from 2015 and 2017 stemmed from Deutsche’s relationship with the Estonian branch of Danske Bank, which has also run afoul of the authorities.
Bank regulators had found that in its dealings with Danske Bank, Deutsche did not properly monitor transactions involving high-risk customers. Deutsche stopped doing business with Danske’s Estonian branch in 2015.
Last year, Danske, the largest bank in Denmark, pleaded guilty to charges arising from a long-running money-laundering investigation. The bank also agreed to pay a $2 billion penalty.
July 19, 2023 Published by The Financial Crime Business News Blog.
