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Deutsche Bank Fined EUR15M for Money-Laundering Scandal
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Per a Reuters Article, Deutsche Bank AG (DB - Free Report) has been slapped with a fine by the Frankfurt prosecutors related to the investigation of German client interactions with offshore entities established by the German bank's Virgin Islands subsidiary — Regula Ltd. Further, prosecutors have called off the probe of two bank employees suspected for engaging in tax evasion.
Notably, the bank had sold the subsidiary in March 2018. Previously, last year, Deutsche Bank's Frankfurt headquarters were raided by 170 police officers for two days. Further, this July, the investigation was supposed to be stretched by the prosecutors, with planned raids on wealthy former clients following the search of houses of eight people in May.
By this time, the prosecutors had called off investigating the money-laundering case due to lack of suspicion. Deutsche Bank has to pay 15 million euros ($16.5 million) as fines and forfeits due to lack of control in its compliance system.
Per the prosecutor's office, the fines imposed reflect the bank’s failure of timely reporting of alleged money-laundering issues associated with Regula, lack of intricate supervision and staff shortage in Deutsche Bank’s anti-money-laundering team from 2015 through early 2018.
“With the closure of these proceedings it is clear that the prosecutors have not found any instances of criminal misconduct on the part of Deutsche Bank employees following the raid of our Frankfurt office in November 2018," Deutsche Bank spokesman Joerg Eigendorf said in a statement.
"The investigation that has now been closed due to lack of sufficient suspicion had a heavy impact on Deutsche Bank last year,” he added. “It is true that the bank had weaknesses in its control environment in the past. We identified these weaknesses and we have addressed them in a disciplined manner,” Eigendorf further noted.
On the contrary, the prosecutor's office will continue its investigation of Regula’s German clients suspected of engaging in tax-evasion activities.
For Deutsche Bank, this settlement is an addition to its growing list of litigation charges. Dismal earnings, a tough operating backdrop and top-level management changes are some of the other major matters that have been dampening the company’s financials.
Currently, Deutsche Bank carries a Zacks Rank #4 (Sell).
Over the past year, shares of Deutsche Bank have depreciated 13.9% on the NYSE compared with industry’s growth of 3.7%.
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Lloyds Banking Group PLC (LYG - Free Report) has been witnessing upward estimate revisions for the past 60 days. Additionally, the stock has surged around 97%, over the last six months. The stock carries a Zacks Rank of 2 (Buy), currently.
Barclays PLC (BCS - Free Report) has been witnessing upward estimate revisions for the past 60 days. In addition, the company’s shares have gained 15.6%, over the last six months. At present, it carries a Zacks Rank of 2.
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Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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Deutsche Bank Fined EUR15M for Money-Laundering Scandal
Per a Reuters Article, Deutsche Bank AG (DB - Free Report) has been slapped with a fine by the Frankfurt prosecutors related to the investigation of German client interactions with offshore entities established by the German bank's Virgin Islands subsidiary — Regula Ltd. Further, prosecutors have called off the probe of two bank employees suspected for engaging in tax evasion.
Notably, the bank had sold the subsidiary in March 2018. Previously, last year, Deutsche Bank's Frankfurt headquarters were raided by 170 police officers for two days. Further, this July, the investigation was supposed to be stretched by the prosecutors, with planned raids on wealthy former clients following the search of houses of eight people in May.
By this time, the prosecutors had called off investigating the money-laundering case due to lack of suspicion. Deutsche Bank has to pay 15 million euros ($16.5 million) as fines and forfeits due to lack of control in its compliance system.
Per the prosecutor's office, the fines imposed reflect the bank’s failure of timely reporting of alleged money-laundering issues associated with Regula, lack of intricate supervision and staff shortage in Deutsche Bank’s anti-money-laundering team from 2015 through early 2018.
“With the closure of these proceedings it is clear that the prosecutors have not found any instances of criminal misconduct on the part of Deutsche Bank employees following the raid of our Frankfurt office in November 2018," Deutsche Bank spokesman Joerg Eigendorf said in a statement.
"The investigation that has now been closed due to lack of sufficient suspicion had a heavy impact on Deutsche Bank last year,” he added. “It is true that the bank had weaknesses in its control environment in the past. We identified these weaknesses and we have addressed them in a disciplined manner,” Eigendorf further noted.
On the contrary, the prosecutor's office will continue its investigation of Regula’s German clients suspected of engaging in tax-evasion activities.
For Deutsche Bank, this settlement is an addition to its growing list of litigation charges. Dismal earnings, a tough operating backdrop and top-level management changes are some of the other major matters that have been dampening the company’s financials.
Currently, Deutsche Bank carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Over the past year, shares of Deutsche Bank have depreciated 13.9% on the NYSE compared with industry’s growth of 3.7%.
Stocks to Consider
KB Financial Group Inc (KB - Free Report) has been witnessing upward estimate revisions for the past 60 days, with the company’s shares appreciating nearly 5.9% on the NYSE, in six months’ time. It sports a Zacks Rank of 1 (Strong Buy), at present.
Lloyds Banking Group PLC (LYG - Free Report) has been witnessing upward estimate revisions for the past 60 days. Additionally, the stock has surged around 97%, over the last six months. The stock carries a Zacks Rank of 2 (Buy), currently.
Barclays PLC (BCS - Free Report) has been witnessing upward estimate revisions for the past 60 days. In addition, the company’s shares have gained 15.6%, over the last six months. At present, it carries a Zacks Rank of 2.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>