There is no end to the troubles of Deutsche Bank (ETR:DBK). British regulator FCA has imposed a fine of $204 million on the Frankfurt, Germany-based bank for serious failures in implementing anti-money laundering controls. The Financial Conduct Authority or FCA is saying that because of this, the bank has exposed the financial system of the United Kingdom to risks of financial crime.
Largest Fine Ever in the United Kingdom
FCA says between January 2012 and December 2015, Deutsche Bank did not properly “properly oversee the formation of new customer relationships and the booking of global business in the U.K”. A $203.83 million or £163 million penalty was charged as a result, making this the largest penalty ever by a British regulator.
Because of the inadequate controls, according to the FCA, customers of Deutsche Bank and their Russian arm DB Moscow ended up transferring more than $6 billion to accounts all over the world from Russia through the UK, in a process that is known as “mirror trades”.
The FCA Issues a Warning
Director of market oversight and enforcement with the FCA, Mark Steward 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 (anti-money laundering) requirements and the failings of Deutsche Bank are simply unacceptable”. He also issued a warning in the statement saying that the other firms need to take notice of the fine that was being imposed. Similar fines may be imposed again in the future, Mark added.
Only yesterday, Deutsche Bank announced they will be paying a fine of $425 million to regulators in New York (New York State Department of Financial Services) over the same “mirror trading” accusations, where $10 billion worth of funds were transferred from Russia.
Last month, Deutsche Bank reached a $7.2 billion settlement with the US Department of Justice over mortgage assets that had gone wrong. Not just that, back in 2015, the bank has had to pay a penalty of $2.5 billion on charges of interest rate manipulation.
Deutsche Bank (ETR:DBK) issued a statement saying they have reached a settlement with authorities in Britain. The chief administrative officer, Karl von Rohr issued a memo to employees saying, they are working with the authorities to quickly resolve the matter. The Financial Conduct Authority of Britain agrees, saying Deutsche Bank has “committed significant resources to improving its AML controls already”.