Deutsche Bank hit with record £500 million fines

Record fines: Deutsche Bank
Daniel Reinhardt/AFP/Getty Images

One of the City’s biggest investment banks has been hit with record fines totalling more than £500 million for “unacceptable” blunders that allowed suspected Russian criminals to launder billions of dollars.

Regulators on both sides of the Atlantic imposed the penalties on Deutsche Bank for failing to carry out basic checks on $10 billion of transfers from Russia to offshore bank accounts.

London’s Financial Conduct Authority (FCA) fined Deutsche £163 million, the biggest anti-money laundering punishment (AML) it has ever imposed on a bank, while New York State’s Department of Financial Services (DFS) gave it a $425 million (£340 million) penalty.

Mark Steward, director of enforcement and market oversight at the FCA, said: “The size of the fine reflects the seriousness of Deutsche Bank’s failings.

“We have repeatedly told firms how to comply with our AML requirements and the failings of Deutsche Bank are simply unacceptable. Other firms should take notice of today’s fine and look again at their own AML procedures to ensure they do not face similar action.”

In total almost 6000 suspicious share trades were executed by Deutsche Bank’s Russian subsidiary DB Moscow between April 2012 and October 2014.

The funds were converted from roubles to US dollars and flowed through Deutsche Bank’s offices in London to accounts in Cyprus, Estonia, and Latvia.

DFS Superintendent Maria Vullo said: “This Russian mirror-trading scheme occurred while the bank was on clear notice of serious and widespread compliance issues dating back a decade.”

The DFS said in a statement that the scheme “was a means for bad actors within a financial institution to achieve improper ends while evading compliance with applicable laws.”

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