Deutsche Bank Fined For Its Involvement In $10B Money Laundering
Financial authority in U.S. and U.K. fine Deutsche Bank for helping Russian investor to launder $10 billion. The bank agree to pay $425 million fine to New York financial regulator and $204 million to British financial authority.
Deutsche Bank involved in a money laundering scheme to launder money through the branches branches in Moscow, London and New York, according to New York Times.
The scheme which was used to launder the money was called mirror trades between the three branches. Mirror trades between those branches occurred from 2011 to 2015. Deutsche Bank helped its clients to launder money by buying blue-chip stock in Russia in rubles through its Russian branch, then later sold the same and identical stocks in London.
Superintendent at the New York State Department of Financial Services Maria T. Vullo said such trade had no economic purpose but to disguise its client’s illicit activities. Moreover, the scheme occurred during the bank was on clear notice of compliance issues for a decade.
“The trades here lacked economic purpose,” Miss Vullo said. “And could have been used to facilitate money laundering or enable other illicit conduct.”
Furthermore, U.K. Financial Conduct Authority fined Deutsche Bank a $204 million (£163 million) for the same illegal trade activities, as reported by The Guardian. British financial regulator also took note that the German bank failed to prevent the mirror scheme due to its weak prevention systems to detect financial crime.
Deutsche Bank has been struggling to return to profitability after suffering losses for years. In 2016, the bank reported to suffer $7.2 billion (€6.7 billion) net loss and under scrutiny which resulted billions of dollar in litigation charges.
Its current CEO John Cryan took the position in July 2016 and he has an enormous task to clean up the mess from the previous management. Watch the report from CNNMoney regarding the problem of Deutsche Bank and its problem of huge fines and disappearing profits below: