New York DFS Fines Deutsche Bank $205M for Foreign Exchange Trading Conduct
The New York Department of Financial Services imposed the big civil penalty as part of a consent order with Frankfurt, Germany-based Deutsche Bank for violating state banking laws in its foreign exchange trading business, the department announced on Wednesday.
June 20, 2018 at 05:51 PM
3 minute read
Deutsche Bank. Credit: Michael A. Scarcella/ ALM
New York state's banking and insurance regulator imposed a $205 million civil penalty as part of a consent order with Frankfurt, Germany-based Deutsche Bank for violating state banking laws in its foreign exchange trading business, the Department of Financial Services announced on Wednesday.
The regulator said the bank violated state laws by trying to improperly coordinate trading activity through online chat rooms, improperly sharing confidential customer information, trading aggressively to skew prices and short-changing customers from 2007 through 2013.
A DFS investigation concluded that the bank engaged in “improper, unsafe and unsound conduct in its foreign exchange business” as a result of failing to implement proper controls during that time period, in which Deutsche Bank was the largest foreign exchange trader in the world. The bank had between 15 and 22 percent of the global foreign exchange market then, the department said.
“Due to Deutsche Bank's lax oversight in its foreign exchange business, including in some instances, supervisors engaging in improper activity, certain traders and salespeople repeatedly abused the trust of their customers and violated New York state law over the course of many years,” said DFS Superintendent Maria Vullo in a statement.
A bank spokesperson said on Wednesday, “Deutsche Bank is pleased to resolve the NYDFS' investigation into historical practices relating to its FX business and that the NYDFS has recognized our extensive cooperation and remediation. The settlement is fully covered by existing provisions.”
As part of the consent order, Deutsche Bank also agreed not to try to apply for a state, local or federal tax credit or deduction for any part of the civil monetary penalty. The bank also disciplined or terminated employees responsible for the misconduct and agreed not to retain or rehire any of them, according to the order.
Under the order, Deutsche Bank also agreed to take remedial actions and to submit plans to the department to increase senior management oversight of compliance with New York state laws and regulations of its foreign exchange trading business. The bank agreed to provide a written plan to improve its compliance risk management program with respect to state and federal laws and regulations, and to create an enhanced written internal audit program of its internal policies and procedures regarding applicable laws and regulations.
Deutsche Bank is licensed in New York to operate a foreign bank branch and a trust company, which together have combined assets of more than $220 billion, according to the order, which was signed by Deutsche Bank general counsel Florian Drinhausen; Dr. Mathias Otto, co-general counsel, Germany; New York branch general counsel Steven Reich; and Joseph Salama, managing director, legal. Kirkland & Ellis also represented the bank before regulators in the foreign exchange trading matter, according to a source familiar with the matter.
Vullo and executive deputy superintendent of enforcement Matthew Levine signed for DFS.
Deutsche Bank previously agreed to a $190 million preliminary settlement in a class action lawsuit over allegations of foreign exchange rate price-fixing.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllGC Pleads Guilty to Embezzling $7.4 Million From 3 Banks
Trump Mulls Big Changes to Banking Regulation, Unsettling the Industry
SEC Issues $6.75M Fine Against Financial Firm Led by Trump's Choice to Lead Commerce Dept.
3 minute readTrending Stories
- 1Trailblazing Broward Judge Retires; Legacy Includes Bush v. Gore
- 2Federal Judge Named in Lawsuit Over Underage Drinking Party at His California Home
- 3'Almost an Arms Race': California Law Firms Scooped Up Lateral Talent by the Handful in 2024
- 4Pittsburgh Judge Rules Loan Company's Online Arbitration Agreement Unenforceable
- 5As a New Year Dawns, the Value of Florida’s Revised Mediation Laws Comes Into Greater Focus
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250