Deutsche Bank is one of the largest banks in Germany and one of the top world’s financial lenders extending its services to over 70 countries worldwide. Lately, this international bank has been in the limelight following suspicious banking activities from leaked FinCEN files.
The leaked information reveals that its top management team was aware of some suspicious money transactions amounting to over $1 trillion but did nothing to stop them. Here are some of the reasons why this bank has, over the years, continued to appear in the headlines for the wrong reasons.
Deutsche Bank Scandals
Below are some of the suspicious money activities that this bank has engaged in;
Interest Rate Manipulation
Deutsche Bank manipulated the special interest rates set to govern interbank transactions. These interest rates include the Euro Interbank Offered Rate (Eurobor), which sets out the interest rates at which European banks can trade euro-denominated bonds against each other.
The London Interbank Offered Rate (Libor) is another interest rate that sets the basis for specific volumes of financial system transactions such as mortgages. The European Commission charged this bank a fine of €725 million for interest rate manipulations.
Here, Deutsche bank engaged in another misconduct involving money-laundering activities where it acted as a correspondent of Danske Bank. About €200 million flowed through its accounts between 2007-2015. The Department of Financial Services (DFS) accused this bank of inadequate customer insight, making it a target for money launders.
Relationship With Jeffery Epstein
Epstein was a regular client of this bank, where he withdrew money to fund his criminal activities. After thorough investigations, DFS accused this bank of knowing about his criminal records and doing nothing about his suspicious transactions. Investigations linked most of these transactions to sexual abuse for minors. DFS charged Deutsche bank a penalty of $150 billion for knowingly facilitating criminal activities.
The US Mortgage Transaction
Deutsche Bank initiated poorly secured mortgages for US property buyers, after which it wrapped them up in highly complex financial products. Later, it gave them top ratings before selling them off to other banks as secure investment products.
After the sale, there was a global financial crisis in which the financial market collapsed and the bonds became worthless. Deutsche Bank made a fortune from its initial sale and due to this suspicious activity, it was ordered to pay Freddie Mac and Fannie Mae, who were the nationalized US construction financiers, a fine of $1.9 billion.
Russian Money Laundering
This international bank was also involved in money laundering activities in Russia. Here, it used stock transactions to launder approximately $10 billion dirty money. Since the transactions were completed in dollars, the US government took charges and fined Deutsche bank $600 million. Following this incident, this bank later terminated its investments and banking practices in Russia.
The above scandals have negatively affected the reputation of Deutsche Bank, resulting in a decline in its share price and general performance. To safeguard a business against such suspicious activities, one can hire professional financial consultancy services from Christian Ellul. This lawyer-cum-business consultant offers business consultancy, investment and taxation services regarding iGaming, Crypto and blockchain.