Deutsche Bank has been landed with a further fine of $630 million, this time for violating New York State’s money-laundering laws through a Russian “mirror trading” scheme.
This comes just days after the bank agreed on a $7.2 billion settlement with the US Justice Department, over its role in the 2008 financial crisis.
In a statement, the Department of Financial Services of New York State said:
“[Deutsche Bank] entered into with the New York State Department of Financial Services (DFS) for violations of New York anti-money laundering laws involving a “mirror trading” scheme among the bank’s Moscow, London and New York offices that laundered $10 billion out of Russia.
“DFS’s investigation found that the bank missed numerous opportunities to detect, investigate and stop the scheme due to extensive compliance failures, allowing the scheme to continue for years.”
The scheme involved so-called mirror trades, illegally moving $10 billion out of Russia. Wealthy clients would buy stock in Moscow with rubles, then sell the stock through the bank’s London branch. The trades, worth between $2 million and $3 million per order, were then cleared through Deutsche Bank’s New York arm.
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.
“It is obvious, though, that the scheme could have facilitated capital flight, tax evasion or other potentially illegal objectives.”
The bank have been fined by both the New York authorities and the UK’s Financial Conduct Authority, totalling $630 million.
Mark Steward, the FCA’s director of enforcement, 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.”