Daily Management Review

Deutsche Bank To Settle US Bribery And Metals Charges For Almost $125M


Deutsche Bank To Settle US Bribery And Metals Charges For Almost $125M
Deutsche Bank AG will settle charges in the United States over it being engaged in foreign bribery schemes and manipulating precious metals markets for a total of almost $125 million.
This is the latest hit to the bank in its efforts to stage a turnaround from a number of scandals in recent years.
A three year deferred prosecution agreement with the US Department of Justice was entered into by the largest lender of Germany along with a civil case linked to the scandal for which it settled with the US Securities and Exchange Commission – the total pay out of the two settlements will be about $2 billion.
According to court papers, almost all of the pay out to be paid by the bank is in relation to the charges that Deutsche Bank’s dealings in Saudi Arabia, Abu Dhabi, China and Italy were done in violation of the federal Foreign Corrupt Practices Act (FCPA). A criminal fine accounts for almost two thirds of the total pay out. 
The settlement deal was announced in public during a a hearing in the federal court in Brooklyn, New York.
"Deutsche Bank engaged in a criminal scheme to conceal payments to so-called consultants worldwide who served as conduits for bribes to foreign officials and others," in order to win and retain "lucrative business projects," Acting U.S. Attorney Seth DuCharme in Brooklyn said in a statement.
"We take responsibility for these past actions," which occurred between 2008 and 2017, a bank spokesman said, and added that there were also thorough internal probes while the bank completely cooperated with the relevant authorities.
After a string of straight five years of losses, Deutsche Bank has been attempting to get back to profitability and as a part of this strategy, the bank has exited some businesses while also massively reducing its workforce by about 18,000 employees.
The bank has also been trying to rebuild its corporate image in the United States even as a number of investigations into its dealings with its long-time client and US president Donald trump are underway. 
Accusations of violations of the books-and-records provisions of the FCPA, under which companies that have US operations are barred from paying bribed elsewhere, have been levelled by US prosecutors against Deutsche Bank.
In a dealing in Saudi Arabia, the bank allegedly disguising bribes paid to a decision of a client there as referral fees while also recording payments of millions of dollars as consultancy fee to an intermediary for an Abu Dhabi official, the prosecutors have said.
Charges against the bank of engaging in making improper payments to a consultant against help to set up a clean energy investment fund with a government organization of China and of paying bribes to an Italian tax judge for referring wealthy clients has been levelled against the German bank by the US SEC.
Deutsche Bank traders were accused of placing fraudulent trades, known as spoofing, to draw in other traders to buy and sell futures contracts at prices that would not have been attractive otherwise, had been brought in against the bank in the metals case.