Deutsche Bank will pay $600m to the New York State Department of Financial Services (NYDFS), $800m to the Commodities Futures Trading Commission (CFTC), $775m to the US Department of Justice (DOJ), and $340m to the UK’s watchdog Financial Conduct Authority (FCA).
NYDFS superintendent Benjamin Lawsky said that the bank will also have to fire and ban individual employees who engaged in the misconduct.
At least 29 Deutsche Bank individuals including managers, traders and submitters, primarily based in London but also in Frankfurt, Tokyo and New York were said to be involved in the misconduct.
Lawsky said: "Deutsche Bank employees engaged in a widespread effort to manipulate benchmark interest rates for financial gain.
"While a number of the employees involved in misconduct have already left the bank, those that remain are being terminated or banned from the New York banking system."
According to FCA, trading desks at the bank manipulated its IBOR submissions across all major currencies between January 2005 and December 2010.
Due to Deutsche Bank’s inadequate systems and controls, the misconduct went unchecked and no systems and controls were in place that are specific to IBOR.
Despite informing about the risk of misconduct, the bank failed to put them in place and was ordered to install an independent monitor for New York Banking Law violations regarding the manipulation of the benchmark interest rates that include the London Interbank Offered Bank (LIBOR), the Euro Interbank Offered Rate (EURIBOR) and Euroyen Tokyo Interbank Offered Rate (TIBOR).
FCA said that the bank destroyed 482 tapes of telephone calls in error, which fell within the scope of an FCA notice requiring their preservation.
In a separate announcement, Deutsche Bank’s wholly-owned subsidiary DB Group Services (UK) has agreed to plead guilty to wire fraud for its role in manipulating LIBOR.
Image: The Deutsche Bank Twin Towers, Deutsche Bank headquarters in Frankfurt. Photo: courtesy of Thomas Wolf
