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Deutsche Bank Prepares to Tackle Legal, Law Enforcement Troubles

bankSince the close of the financial crisis, Germany's largest bank, Deutsche Bank, has faced several settlements related to violations of U.S. sanctions, rigging of interest-rate benchmarks, and allegations that it defrauded mortgage issuers Fannie Mae and Freddie Mac.

Now, the bank is ready to resolve its legal and law enforcement problems that have occurred all over the world since the close of the financial crisis.

As of today, the bank has paid over $9.3 billion in fines and legal settlements since 2008, according to a Bloomberg article.

In addition to dealing with a variety mortgage-backed securities suits, Deutsche Bank is also facing an investigation by U.S. and U.K. authorities over whether its internal controls failed to catch some $10 billion in transactions that may have moved money out of Russia, Bloomberg reported.

In August 2015, the 5th U.S. Circuit Court of Appeals in New Orleans has revived a lawsuits filed by the Federal Deposit Insurance Corp., accusing Deutsche Bank, Goldman Sachs, and the Royal Bank of Scotland of fraud with regards to $840 million worth of mortgage-backed securities sold to a Texas bank that later failed, according to multiple media reports.

In another case, in December 2013,  Deutsche Bank said it would pay $1.9 billion to settle claims that it defrauded Fannie Mae and Freddie Mac in the sale of mortgage-backed securities before the 2008 financial crisis, according to an article from Reuters.

"Today's agreement marks another step in our efforts to resolve the bank's legacy issues, and we intend to make further progress in this regard throughout 2014," Co-Chief Executive Officers Juergen Fitschen and Anshu Jain said in a statement.

In a note to employees, Co-CEO John Cryan said the bank is “absolutely rock solid”and has a plan to cover its legal costs. “I am personally investing time to resolve successfully and speedily open regulatory and legal cases. A small group of senior people, led by me, will focus on this."

 

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