Deutsche Fined for Currency Failings -- WSJ
June 21 2018 - 03:02AM
Dow Jones News
By Jenny Strasburg
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (June 21, 2018).
New York's financial-services regulator said it fined Deutsche
Bank AG $205 million over allegations it sought to manipulate
currency prices and mislead clients while failing to protect
confidential customer information.
The German lender agreed to the fine in a consent order with New
York's Department of Financial Services. In a statement Wednesday,
the regulator said Deutsche Bank traders and salespeople sought to
skew foreign-exchange prices and charge excessive spreads. The
regulator cited other control failures that it said had "the
potential to improperly disadvantage customers and improperly
affect markets."
The civil investigation covered the years 2007 to 2013, during
which Deutsche Bank was the world's largest currency trader.
Deutsche Bank said the settlement is covered by existing legal
provisions. In a statement, the bank said it "is pleased to resolve
the NYDFS' investigation into historical practices relating to its
FX business and that the NYDFS has recognized our extensive
cooperation and remediation."
The settlement resolves the last active regulatory probe into
Deutsche Bank currency-trading practices. The bank didn't admit or
deny the findings of the investigation. The lender has paid a total
of about $357 million to resolve currency-trading regulatory
probes, including the New York fine announced Wednesday. By
contrast, several other investment banks have paid more than $1
billion in fines each in various investigations in the U.S. and
elsewhere.
One practice cited by the New York regulator was "jamming the
fix," which involved Deutsche Bank traders improperly seeking to
skew currency markets by accumulating large positions just before
and after the window of time when currency prices were set.
Sales staff at the bank also took steps to shortchange customers
by doctoring trade-execution markups or dicing up customer orders
to keep portions of trades in the bank's own account, according to
the regulator. The moves -- and failures to correct errors in
record-keeping -- were aimed at boosting the bank's profits while
filling client orders at sometimes less-favorable prices, the
regulator said.
Deutsche Bank employees sought to manipulate currency benchmarks
to benefit their trading profits, and swapped customer identity and
order information with competitors in ways that allowed traders to
collude, the Department of Financial Services said.
The bank agreed to provide the regulator with plans to improve
compliance and internal auditing.
Write to Jenny Strasburg at jenny.strasburg@wsj.com
(END) Dow Jones Newswires
June 21, 2018 02:47 ET (06:47 GMT)
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