Bank Regulation

Deutsche Bank Settles AML Scandal For $16M

Deutsche Bank Settles AML Scandal For $16M

Deutsche Bank has settled a case with Frankfurt prosecutors that involved a raid on its offices and resulted in a huge hit on earnings and stock value over suspected money laundering, according to a report by Bloomberg

The fine is a relatively small one at 15 million euros ($16.6 million), and is a consequence of the bank not flagging suspicious transactions in time, as well as not having enough anti-money laundering (AML) oversight.

Prosecutors also ended an investigation into two of the bank’s employees due to lack of evidence.

When footage of the raid, which involved about 170 authorities, was released, the bank’s shares plummeted to an all-time low. Chief Executive Officer Christian Sewing would later say that the raids also saw the exodus of many clients who were spooked by the actions, which led to cavernous Q4 losses. 

Deutsche Bank spokesman Joerg Eigendorf said that the settlement puts a stamp on a case “that burdened us a lot last year.” The bank said it accepts the fine.

Deutsche Bank has been in the crosshairs of various investigations, both by U.S. and German authorities, over money laundering issues and AML controls. Sewing said the bank was focused on fixing and improving the lapses in those controls, and that the bank has tripled its anti-financial crime workforce and invested 700 million euros in “modernizing the most important” ways of combating money laundering. 

This doesn’t mean the bank has been especially successful in its efforts. Last month, Deutsche Bank told U.K. regulators that it still has ongoing problems processing high-value payments despite more than three years of remediation efforts. 

The German bank’s executives met with Bank of England (BoE) officials at the end of October following an internal audit examining its compliance with expected standards.

In March, Deutsche told BoE that system improvements were on track. After the audit, the bank had to admit that its technology wasn’t meeting standards.


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