Deutsche Bank to pay more than $124 million to resolve bribery, metals charges

FILE PHOTO: The logo of Deutsche Bank is pictured on a company's office in London
FILE PHOTO: The logo of Deutsche Bank is pictured on a company's office in London, Britain July 8, 2019. REUTERS/Simon Dawson/File Photo

January 8, 2021

By Noor Zainab Hussain and Jonathan Stempel

NEW YORK (Reuters) – Deutsche Bank AG agreed to pay more than $124 million to avoid prosecution and resolve charges it violated U.S. anti-bribery and commodities trading laws, the latest blow for the German bank as it tries to repair its image after a series of scandals.

The payout, roughly two-thirds of which is a criminal fine, is part of a three-year deferred prosecution agreement with the U.S. Department of Justice, and a related civil settlement with the U.S. Securities and Exchange Commission.

Both accords were made public on Friday at a hearing in the federal court in Brooklyn, New York.

Deutsche Bank said “we take responsibility for these past actions,” which occurred from 2008 to 2017, following “thorough” internal probes and full cooperation with authorities.

U.S. prosecutors accused Deutsche Bank of violating books-and-records provisions of the Foreign Corrupt Practices Act, which bars companies with U.S. operations from paying bribes elsewhere.

They said the violations included disguising bribes paid to a client’s “decisionmaker” in Saudi Arabia as “referral fees” in order to retain that client’s business, and concealing millions of dollars of payments to an intermediary for an Abu Dhabi official by recording them as “consultancy” fees.

The commodities fraud charge arose from Deutsche Bank precious metals futures traders accused of placing fraudulent trades, known as spoofing, to induce other traders to buy and sell futures contracts at prices they otherwise would not have.

Deutsche Bank is trying to regain profitability after five years of losses, including by exiting some businesses and reducing its workforce by 18,000.

The bank has also been trying to restore its image in Washington amid several investigations into its dealings with U.S. President Donald Trump, a longtime client.

Most of Friday’s payout related to the corruption allegations.

In 2019, Deutsche Bank agreed to pay more than $16 million to resolve SEC accusations it violated the FCPA by hiring unqualified relatives of government officials in Asia and Russia in order to win or retain business. https://reut.rs/3i76g6Z

Credit Suisse Group AG paid $77 million to settle a similar case last year, while JPMorgan Chase & Co agreed in 2016 to pay $264 million to resolve U.S. claims it hired the relatives of Chinese officials to win banking deals.

(Reporting by Noor Zainab Hussain in Bengaluru, Jonathan Stempel in New York and Michelle Price in Washington; Additional reporting by Jody Godoy and Matt Scuffham in New York; Editing by Arun Koyyur, David Evans and Sonya Hepinstall)