US Federal Reserve Fines Deutsche Bank $186 Million for Anti-Money Laundering Failures
The Federal Reserve announced on July 20th that it had fined Deutsche Bank (DBKGn.DE) and some of its US affiliates $186 million for failing to address money laundering control problems adequately.
As a result of failing to abide by money laundering controls and shortcomings that the US central bank previously highlighted, Deutsche Bank and its affiliates in the US have been fined $186 million by the Fed. Despite years of struggling with European and US regulators to gain solid ground, the German lender has unfortunately been hit again with lingering issues.
A separate consent order required Deutsche to improve its data management and risk assessment in order to avoid “additional and escalated penalties.” A 2015 and 2017 Fed consent order identified Deutsche’s relationship with Danske Bank’s Estonian branch. Deutsche Bank said the Fed’s identified shortcomings would be addressed in the “near future” and that current provisions have covered a significant portion of the fine.
In recent years, Deutsche has been dealing with numerous regulatory challenges. A German watchdog issued a recommendation in November to tighten up money laundering controls. Greenwashing allegations at DWS (DWSG.DE), a Deutsche-controlled investment firm, have been investigated by US and German authorities.
A $125 million settlement was reached between the bank and the government in 2021 to avoid prosecution for alleged manipulation of precious metals markets and illegal foreign bribery schemes. Additionally, the German bank settled a lawsuit filed by women accusing it of facilitating the sex trafficking of late financier Jeffrey Epstein for $75 million.
According to the Federal Reserve’s latest order, Deutsche Bank cleared $276 billion for Danske Bank with “a significant portion” of high-risk non-resident customers. Despite ending Deutsche’s relationship with Danske in 2015, Deutsche’s money laundering policies lacked sufficient effectiveness, according to the Fed. A court found Danske guilty in December of committing bank fraud.
Suggested Reads:
GERMAN WATCHDOG EXTENDS N26 MEASURES TO PREVENT MONEY LAUNDERING
FCA FINES BASTION CAPITAL FOR SERIOUS AML FAILINGS
FEDERAL COURT FINES DIGITEX FUTURES $15M FOR KYC AND AML FAILINGS
