Deutsche Bank Rotten Score Breakdown

Deutsche Bank reached approximately $2.5 billion in coordinated settlements with U.S. and UK authorities in 2015 after regulators found that traders and benchmark submitters manipulated globally important interest-rate benchmarks, including LIBOR and EURIBOR, to benefit Deutsche Bank's trading positions. LIBOR and EURIBOR were among the world's most important financial benchmarks. They were used to determine interest rates on enormous volumes of financial products, including derivatives, corporate financing and other loans. Manipulating these benchmarks therefore had implications far beyond individual trades inside Deutsche Bank. According to the U.S. Department of Justice, Deutsche Bank derivatives traders requested that employees responsible for submitting benchmark rates alter their submissions in directions that would benefit the traders' financial positions. Submitters sometimes accommodated those requests rather than making submissions based solely on legitimate market information. U.S. Department of Justice – Deutsche Bank LIBOR manipulation resolution: https://www.justice.gov/archives/opa/pr/deutsche-bank-subsidiary-sentenced-manipulating-libor Deutsche Bank's London subsidiary, DB Group Services (UK) Limited, pleaded guilty to wire fraud for its role in manipulating LIBOR. The subsidiary admitted that employees engaged in a scheme to manipulate benchmark submissions in order to benefit Deutsche Bank's derivatives trading positions. The DOJ resolution included a $625 million criminal penalty: a $150 million penalty under Deutsche Bank AG's deferred prosecution agreement and a $475 million criminal fine imposed on DB Group Services (UK) Limited. U.S. DOJ – Deutsche Bank benchmark-manipulation case: https://www.justice.gov/archives/opa/pr/deutsche-bank-subsidiary-sentenced-manipulating-libor The U.S. Commodity Futures Trading Commission separately found that Deutsche Bank routinely engaged in acts designed to manipulate LIBOR, EURIBOR and other benchmark rates. According to the CFTC, Deutsche Bank traders asked benchmark submitters to make submissions favorable to their trading positions, and submitters sometimes agreed. The regulator found that the misconduct involved multiple traders, offices and currencies and continued for years. The CFTC imposed an $800 million civil monetary penalty on Deutsche Bank, which at the time was the largest penalty the CFTC had imposed in a benchmark-manipulation case. U.S. Commodity Futures Trading Commission – $800 million Deutsche Bank penalty: https://www.cftc.gov/PressRoom/PressReleases/7159-15 New York's Department of Financial Services also investigated Deutsche Bank and found widespread manipulation involving employees in London, Frankfurt, New York and Tokyo. The New York regulator described communications in which traders openly requested favorable submissions from colleagues. The conduct involved several benchmark rates and currencies and occurred over an extended period. New York DFS imposed a $600 million penalty on Deutsche Bank and required the bank to terminate seven employees involved in the misconduct who remained employed at the time of the settlement. New York Department of Financial Services – Deutsche Bank benchmark manipulation enforcement action: https://www.dfs.ny.gov/reports_and_publications/press_releases/pr1504231 The UK's Financial Conduct Authority reached similar conclusions. The FCA found that Deutsche Bank employees manipulated both LIBOR and EURIBOR submissions and that misconduct occurred across several business divisions and locations. The FCA also found serious deficiencies in Deutsche Bank's systems and controls and criticized the bank's handling of the regulatory investigation. The FCA imposed a £226.8 million penalty, which at the time was the largest fine the FCA had ever imposed. UK Financial Conduct Authority – Deutsche Bank £226.8 million LIBOR/EURIBOR penalty: https://www.fca.org.uk/news/press-releases/deutsche-bank-fined-%C2%A32268-million-libor-and-euribor-failings The FCA's findings were particularly damaging because the regulator concluded that Deutsche Bank had failed to deal with it in an open and cooperative manner during the investigation. The FCA said Deutsche Bank had provided a false attestation concerning the adequacy of its systems and controls and had misleadingly claimed that a report commissioned by the German regulator BaFin contained no material findings relating to Deutsche Bank when that was not the case. The coordinated enforcement actions resulted in approximately $2.5 billion in financial penalties, making the Deutsche Bank settlement one of the largest enforcement resolutions arising from the global benchmark-manipulation scandal. Company response: Deutsche Bank accepted the settlements and acknowledged serious failures. Then co-CEOs Jürgen Fitschen and Anshu Jain said the bank deeply regretted the matter and that the employees responsible had brought discredit to Deutsche Bank. The bank said it had disciplined or dismissed individuals involved and substantially strengthened its controls, surveillance and compliance systems. Deutsche Bank – Company information: https://www.db.com/ Key facts: Deutsche Bank traders and benchmark submitters manipulated LIBOR and EURIBOR to benefit the bank's trading positions; misconduct involved employees operating across major financial centres including London, Frankfurt, New York and Tokyo; Deutsche Bank's UK subsidiary pleaded guilty to wire fraud; the DOJ resolution involved $625 million in criminal penalties; the CFTC imposed an $800 million penalty; New York DFS imposed $600 million; the UK FCA imposed £226.8 million; and the coordinated settlements amounted to approximately $2.5 billion. The case is particularly serious because LIBOR and EURIBOR were not internal Deutsche Bank prices. They were global financial benchmarks relied upon throughout the financial system. Deutsche Bank employees manipulated submissions intended to represent objective market borrowing conditions in order to benefit their own trading positions. The misconduct persisted across multiple offices, currencies and years, and one Deutsche Bank subsidiary ultimately pleaded guilty to criminal wire fraud.

Deutsche Bank was penalized by the U.S. Commodity Futures Trading Commission (CFTC) in January 2018 after regulators found that its precious-metals traders engaged in a scheme to manipulate futures markets using deceptive trading techniques known as “spoofing.” The conduct occurred from at least February 2008 through September 2014 and involved precious-metals futures contracts traded on the Commodity Exchange (COMEX). U.S. CFTC – Deutsche Bank $30 million precious-metals manipulation settlement: https://www.cftc.gov/PressRoom/PressReleases/7682-18 According to the CFTC, Deutsche Bank traders placed large buy or sell orders that they intended to cancel before execution. These fake orders were designed to create a false appearance of market demand or supply and influence other market participants. A trader could, for example, place a genuine smaller order on one side of the market while placing a much larger order on the opposite side that he did not intend to execute. The larger “spoof” order created the appearance of increased buying or selling pressure. After other traders reacted, the Deutsche Bank trader could execute the genuine order at a more favorable price and cancel the deceptive orders. The CFTC found that Deutsche Bank's traders intended to manipulate precious-metals futures prices and sometimes succeeded in doing so, allowing the bank to benefit from artificial prices created by the manipulation. The regulator also identified another form of manipulation involving customer stop-loss orders. Between December 2009 and February 2012, a Deutsche Bank precious-metals trader in Singapore placed orders and executed trades designed to move market prices sufficiently to trigger customers' stop-loss orders for the benefit of his own proprietary trading. In other words, the misconduct was not limited to displaying fake market liquidity. The CFTC found instances in which trading was deliberately conducted to cause Deutsche Bank customers' stop-loss orders to execute, benefiting the trader's position. The CFTC also found serious supervisory failures. Deutsche Bank Securities' electronic surveillance system had actually identified specific instances of potential misconduct, but according to the regulator the bank failed to follow up on the majority of potential misconduct identified by its own surveillance system. CFTC – Broader enforcement action against Deutsche Bank and individual traders: https://www.cftc.gov/PressRoom/PressReleases/7681-18 Deutsche Bank agreed to pay a $30 million civil monetary penalty, cease further violations and implement enhanced training, systems and controls designed to detect and prevent spoofing. At the time, the CFTC said the $30 million penalty was its largest spoofing-related penalty to date. The evidence against individual Deutsche Bank traders became even stronger in subsequent criminal proceedings. In September 2020, a U.S. federal jury convicted former Deutsche Bank precious-metals traders James Vorley and Cedric Chanu of wire fraud affecting a financial institution for their roles in deceptive and manipulative precious-metals trading. U.S. Department of Justice – Two former Deutsche Bank traders convicted: https://www.justice.gov/archives/opa/pr/two-former-deutsche-bank-traders-convicted-engaging-deceptive-and-manipulative-trading According to evidence presented at trial, Vorley and Chanu placed fraudulent orders they did not intend to execute in order to create a false impression of supply and demand and induce other traders to transact at prices, quantities or times at which they otherwise would not have traded. The conduct involved futures contracts for gold, silver, platinum and palladium. The CFTC separately alleged that Vorley and Chanu spoofed repeatedly, coordinated spoofing with other traders on Deutsche Bank's precious-metals desk and taught another trader on the desk how to spoof. Vorley and Chanu were subsequently each sentenced to 12 months and one day in federal prison for their participation in the fraud scheme. DOJ – James Vorley prison sentence: https://www.justice.gov/archives/opa/pr/former-deutsche-bank-commodities-trader-sentenced-prison-fraud-scheme DOJ – Cedric Chanu prison sentence: https://www.justice.gov/archives/opa/pr/second-former-deutsche-bank-commodities-trader-sentenced-prison-fraud-scheme Deutsche Bank's commodities misconduct was also addressed again in its 2021 Deferred Prosecution Agreement with the U.S. Department of Justice. That agreement resolved both a separate FCPA investigation and the bank's precious-metals commodities-fraud conduct. The combined DOJ/SEC resolution exceeded $130 million, although that entire amount should not be attributed solely to precious-metals manipulation, because it also covered the separate FCPA case. U.S. Department of Justice – Deutsche Bank 2021 commodities fraud and FCPA resolution: https://www.justice.gov/archives/opa/pr/deutsche-bank-agrees-pay-over-130-million-resolve-foreign-corrupt-practices-act-and-fraud Company response: Deutsche Bank cooperated with the CFTC investigation and undertook remedial measures. The CFTC specifically recognized the bank's substantial cooperation and proactive remediation and said this resulted in a substantially reduced civil penalty. Deutsche Bank was required to maintain enhanced training programmes, surveillance systems and controls designed to detect and deter future spoofing by its personnel. Key facts: Deutsche Bank precious-metals traders engaged in manipulative trading from at least 2008 through 2014; traders placed orders they intended to cancel in order to create false signals of market supply or demand; the CFTC found that traders intended to manipulate prices and sometimes succeeded; trading was also used to trigger customers' stop-loss orders for proprietary benefit; Deutsche Bank's surveillance systems identified potential misconduct but the bank failed to follow up on the majority of the identified instances; the conduct involved precious metals including gold, silver, platinum and palladium; Deutsche Bank paid a $30 million CFTC penalty; and former Deutsche Bank traders James Vorley and Cedric Chanu were convicted by a federal jury and subsequently sentenced to prison. The case is particularly serious because the misconduct directly attacked the integrity of the market itself. The deceptive orders were specifically designed to make other market participants believe that supply or demand existed when it did not, influencing how those participants traded. The CFTC additionally found that Deutsche Bank's own surveillance system detected potential misconduct but that the bank failed to investigate the majority of those alerts.

Deutsche Bank reached coordinated resolutions with the U.S. Department of Justice and Securities and Exchange Commission in January 2021 over violations of the Foreign Corrupt Practices Act involving the bank's use of third-party intermediaries, consultants and finders to obtain and retain business around the world. According to the SEC, from at least 2009 through 2016, Deutsche Bank used hundreds of business development consultants and other intermediaries. These included foreign officials, their relatives and associates, sometimes in circumstances presenting significant bribery risks that the bank failed to adequately assess or mitigate. SEC – Deutsche Bank FCPA enforcement action: https://www.sec.gov/newsroom/press-releases/2021-3 SEC – Full enforcement proceeding: https://www.sec.gov/enforcement-litigation/administrative-proceedings/34-90875-s The SEC found that weaknesses in Deutsche Bank's internal accounting controls resulted in approximately $7 million in bribe payments or payments for unknown, undocumented or unauthorized services. Those payments were improperly recorded in Deutsche Bank's books as legitimate business expenses. The SEC also found that the transactions involved invoices and other documentation falsified by Deutsche Bank employees. The conduct was not limited to a small isolated office. The SEC's FCPA enforcement records identify improper intermediary payments involving business in China, the United Arab Emirates, Italy and Saudi Arabia. The SEC further found that certain former members of Deutsche Bank's senior management, including members of its Management Board, knew that the bank's controls governing these intermediaries were insufficient. Despite this, Deutsche Bank failed to take sufficient steps to address and remediate the known control failures until 2016. The SEC calculated that Deutsche Bank was unjustly enriched by approximately $35 million as a result of the conduct. The bank agreed to pay approximately $35 million in disgorgement plus $8 million in prejudgment interest, resulting in an SEC settlement exceeding $43 million. U.S. Department of Justice – Deutsche Bank FCPA and fraud resolution: https://www.justice.gov/archives/opa/pr/deutsche-bank-agrees-pay-over-130-million-resolve-foreign-corrupt-practices-act-and-fraud Deutsche Bank also entered into a three-year Deferred Prosecution Agreement with the U.S. Department of Justice. The criminal information charged the bank with conspiracy to violate the FCPA's books-and-records and internal-accounting-controls provisions. The DOJ described a scheme in which corrupt payments and bribes made through third-party intermediaries were concealed by falsely recording them in Deutsche Bank's books and records. According to the Justice Department, consultants were used as conduits for bribes to foreign officials and others so that Deutsche Bank could improperly obtain and retain lucrative business. The DOJ resolution also covered a separate commodities-fraud scheme involving manipulation of precious-metals futures, which should not be confused with the FCPA conduct. The combined DOJ resolution involved criminal penalties of approximately $85.2 million, criminal disgorgement of approximately $681,000 and victim compensation of approximately $1.22 million, alongside the approximately $43.3 million SEC resolution. Altogether, the coordinated resolutions exceeded $130 million, but that total covered both the FCPA case and the separate commodities-fraud conduct. DOJ – Deferred Prosecution Agreement: https://www.justice.gov/archives/opa/press-release/file/1360741/dl Company response: Deutsche Bank entered into the Deferred Prosecution Agreement and SEC settlement and agreed to the financial penalties and compliance obligations. The SEC credited Deutsche Bank with cooperation and remedial efforts. Deutsche Bank subsequently disclosed that it had reached settlements with both the DOJ and SEC concerning its historical use of finders and consultants and its compliance with the FCPA. Key facts: The misconduct occurred from at least 2009 through 2016; Deutsche Bank used hundreds of third-party business-development consultants and finders; some intermediaries were foreign officials, their relatives or associates; approximately $7 million consisted of bribes or payments for unknown, undocumented or unauthorized services; employees falsified invoices and documentation and recorded improper payments as legitimate expenses; former senior management personnel, including Management Board members, were aware of weaknesses in the bank's internal controls; Deutsche Bank did not sufficiently remediate those known weaknesses until 2016; the SEC calculated approximately $35 million in unjust enrichment; Deutsche Bank paid more than $43 million to resolve the SEC FCPA case; and the bank entered a three-year Deferred Prosecution Agreement with the DOJ. The case is particularly serious because regulators did not describe merely a rogue employee secretly paying a bribe. The SEC found that Deutsche Bank used hundreds of intermediaries over approximately seven years, that some former senior management personnel knew the controls were inadequate, and that employees falsified documentation to make improper payments appear to be legitimate business expenses.

Deutsche Bank agreed in August 2019 to pay more than $16 million to resolve U.S. Securities and Exchange Commission charges that it violated the Foreign Corrupt Practices Act (FCPA) through hiring practices designed to improperly influence foreign government officials. According to the SEC, between at least 2006 and 2014, Deutsche Bank provided valuable employment opportunities to relatives of foreign government officials as a personal benefit to those officials in order to influence them to help the bank obtain or retain business and other benefits. U.S. Securities and Exchange Commission – Deutsche Bank FCPA hiring case: https://www.sec.gov/enforcement-litigation/administrative-proceedings/34-86740-s Full SEC enforcement order: https://www.sec.gov/files/litigation/admin/2019/34-86740.pdf The practice involved what Deutsche Bank internally called “Referral Hires” — candidates referred by clients, potential clients or government officials. According to the SEC, Deutsche Bank employees hired relatives at the request of government officials in the Asia-Pacific region and Russia in circumstances where employment was used to obtain or retain business or other benefits. These candidates did not always go through Deutsche Bank's normal competitive recruitment process. The SEC found that Referral Hires frequently bypassed the bank's highly competitive, merit-based hiring process and were sometimes less qualified than candidates recruited through the normal process. The SEC's detailed order describes cases involving China and Russia. In one example, Deutsche Bank hired the daughter of the chairman of a large Chinese state-owned enterprise after executives from the company requested that she be hired. The SEC found that she had minimal relevant work experience. Deutsche Bank employees subsequently assigned Referral Hires to deals where their parent or close relative was a key decision-maker, allowing the bank to capitalize further on the personal relationship. The misconduct is particularly significant because Deutsche Bank itself recognized the corruption risk associated with these practices. The SEC found that the bank understood that hiring relatives of government officials and clients in exchange for business could violate anti-bribery laws, including the FCPA. Deutsche Bank introduced a written policy in its Asia-Pacific operations in 2010 intended to detect and prevent corrupt referral hiring. However, the SEC found that the policy did not cover all categories of hires and that the bank lacked systems capable of adequately verifying compliance with it. The SEC also found that Deutsche Bank employees created false books and records that concealed aspects of the referral-hiring practices and failed to accurately document and record certain related expenses. The regulator concluded that Deutsche Bank's internal accounting controls surrounding hiring were insufficient to provide reasonable assurance that employees were complying with anti-bribery laws. The SEC determined that Deutsche Bank obtained substantial business connected with the referral-hiring programme. For transactions within the applicable statute-of-limitations period, the regulator calculated that Deutsche Bank had been unjustly enriched by approximately $10.8 million as a result of business associated with Referral Hires. Deutsche Bank settled the SEC case without admitting or denying the SEC's findings. The bank agreed to pay approximately $10.8 million in disgorgement, approximately $2.4 million in prejudgment interest, and a $3 million civil penalty, bringing the total settlement to more than $16 million. Company response: The SEC credited Deutsche Bank with cooperating with the investigation and taking remedial action. The settlement resolved the SEC's findings concerning deficiencies in the bank's hiring-related accounting controls and recordkeeping. Because Deutsche Bank settled without admitting or denying the findings, the case should be described as an SEC enforcement finding and settlement rather than as a criminal bribery conviction. Key facts: The conduct occurred between at least 2006 and 2014; Deutsche Bank provided employment to relatives of foreign government officials to improperly influence officials in connection with obtaining or retaining business; the practice involved government officials in the Asia-Pacific region and Russia; some Referral Hires bypassed the bank's normal competitive hiring process and were less qualified than ordinary candidates; Deutsche Bank employees sometimes placed Referral Hires on deals involving their influential relatives; the bank knew such hiring could create anti-bribery risks; employees created false records connected with the practices; the SEC calculated approximately $10.8 million in unjust enrichment from relevant transactions; and Deutsche Bank paid more than $16 million to settle the SEC case. The case is significant because the benefit allegedly provided to officials was not a conventional envelope of cash. Employment itself became the thing of value. According to the SEC, Deutsche Bank gave coveted employment opportunities to relatives of influential officials and clients in order to obtain business advantages, despite having already recognized internally that this type of conduct could violate anti-bribery laws.

Deutsche Bank was fined by U.S. and UK regulators in 2017 after serious anti-money-laundering failures allowed approximately $10 billion to be transferred out of Russia through a complex system of securities transactions known as “mirror trades.” The scheme operated through Deutsche Bank's offices in Moscow, London and New York. Customers would purchase Russian blue-chip shares in Moscow using Russian rubles while a related counterparty would simultaneously sell the same quantity of the same securities through Deutsche Bank in London for foreign currency. The transactions had little apparent economic purpose beyond converting rubles into foreign currency and moving money from Russia into overseas bank accounts. New York Department of Financial Services – Deutsche Bank $425 million Russian mirror-trading enforcement action: https://www.dfs.ny.gov/reports_and_publications/press_releases/pr1701301 New York's Department of Financial Services found that approximately $10 billion was improperly transferred out of Russia through the broader trading activity. The regulator said Deutsche Bank missed numerous opportunities to detect, investigate and stop the scheme because of extensive failures in its anti-money-laundering compliance systems. According to the UK's Financial Conduct Authority, Deutsche Bank Moscow executed more than 2,400 pairs of mirror trades between April 2012 and October 2014. These transactions transferred more than $6 billion from Russia, through Deutsche Bank's UK operations, into overseas bank accounts, including accounts in Cyprus, Estonia and Latvia. The FCA identified another 3,400 one-sided trades, overwhelmingly sales, totaling approximately $3.8 billion. Regulators concluded that most or all of these were likely associated with mirror trading, bringing the total amount transferred out of Russia through the relevant activity to approximately $10 billion. UK Financial Conduct Authority – Deutsche Bank £163 million AML penalty: https://www.fca.org.uk/news/press-releases/fca-fines-deutsche-bank-163-million-anti-money-laundering-controls-failure The FCA found serious weaknesses throughout Deutsche Bank's anti-money-laundering framework. These included flawed customer and country risk-rating methodologies, deficient AML policies and procedures, inadequate AML technology, lack of automated systems capable of detecting suspicious trades and inadequate oversight of transactions conducted across different jurisdictions. Deutsche Bank also failed to obtain sufficient information about some customers to properly understand the purpose of their banking relationships or establish the source of their wealth and funds. The FCA concluded that these failures exposed the UK financial system to the risk of financial crime. The New York regulator separately concluded that Deutsche Bank had failed to maintain an effective anti-money-laundering compliance programme and had missed numerous opportunities to identify and stop the suspicious trading activity. New York DFS imposed a $425 million civil penalty and required Deutsche Bank to appoint an independent monitor to review its compliance programmes, policies and procedures. One day later, the UK's FCA imposed an additional £163,076,224 penalty. At the time, this was the largest AML-related financial penalty ever imposed by the FCA or its predecessor. Together, the U.S. and UK settlements amounted to approximately $630 million in penalties. Deutsche Bank – Company announcement regarding the settlements: https://www.db.com/news/detail/20170131-deutsche-bank-reaches-settlements-over-russian-securities-trades Company response: Deutsche Bank accepted the settlements and acknowledged that regulators had identified deficiencies in its historical anti-money-laundering controls. The bank said it had committed significant resources to improving those controls and cooperated with the investigations. The FCA specifically acknowledged Deutsche Bank's cooperation and said the bank had undertaken substantial remediation. Deutsche Bank also received a 30% reduction in the FCA penalty because it agreed to settle at an early stage of the investigation. Key facts: Approximately $10 billion was transferred out of Russia through the relevant trading activity; more than 2,400 pairs of mirror trades were executed between April 2012 and October 2014; more than $6 billion was moved through those paired transactions; regulators identified another approximately $3.8 billion of one-sided trades believed largely to represent additional mirror trading; transactions involved Deutsche Bank operations in Moscow, London and New York; regulators found serious deficiencies in customer due diligence, transaction monitoring, AML technology and management oversight; New York DFS imposed a $425 million penalty; the UK FCA imposed a £163 million penalty; and Deutsche Bank was required to strengthen its compliance programme and submit to independent monitoring. The case is particularly serious because this was not an isolated suspicious transaction that escaped detection. Regulators found systemic weaknesses across Deutsche Bank's anti-money-laundering controls that allowed thousands of transactions and billions of dollars to pass through the bank over several years. The FCA said the activity was conducted in a manner “highly suggestive of financial crime,” while New York regulators concluded that Deutsche Bank missed numerous opportunities to detect, investigate and stop it.

Deutsche Bank was penalized by the New York State Department of Financial Services (DFS) in July 2020 for significant compliance failures connected to its banking relationship with convicted sex offender Jeffrey Epstein. The enforcement action was the first taken by a regulator against a financial institution over its dealings with Epstein. Deutsche Bank began its relationship with Epstein in August 2013, several years after Epstein's 2008 conviction involving prostitution with a minor. The bank classified Epstein as a high-risk client, yet according to DFS failed to adequately monitor his accounts and transactions despite extensive publicly available information about his criminal history. Epstein, his related entities and associates ultimately maintained more than 40 accounts at Deutsche Bank during the relationship. New York State Department of Financial Services – Deutsche Bank/Epstein enforcement action: https://www.dfs.ny.gov/reports_and_publications/press_releases/pr202007071 Full New York DFS Consent Order: https://www.dfs.ny.gov/industry_guidance/enforcement_discipline/ea20200706_deutsche_bank DFS found that Deutsche Bank processed hundreds of transactions totaling millions of dollars that should have prompted additional scrutiny given Epstein's history. Transactions identified by the regulator included payments to individuals publicly alleged to have been Epstein's co-conspirators; payments to Russian models; payments covering women's school tuition, hotel and rent expenses; payments directly to numerous women with Eastern European surnames; and substantial payments to law firms. The regulator also identified more than $800,000 in suspicious cash withdrawals over approximately four years. According to DFS, the withdrawals were conducted by an Epstein associate and frequently involved amounts structured below thresholds that would trigger certain reporting requirements. DFS also identified payments exceeding $7 million to settle legal matters and dozens of additional payments totaling more than $6 million for what appeared to be legal expenses for Epstein and his co-conspirators. Despite Epstein's risk profile, DFS found that Deutsche Bank's monitoring failed to properly scrutinize these transactions and that the bank's relationship-management structure created serious weaknesses in oversight. The regulator concluded that Deutsche Bank had conducted business in an unsafe and unsound manner and failed to maintain an effective and compliant anti-money-laundering programme in connection with the relationships covered by the enforcement action. Deutsche Bank's relationship with Epstein lasted from 2013 until 2018, when the bank decided to terminate it. The regulator's investigation found significant failures in how the bank had onboarded, monitored and managed Epstein as a high-risk customer during that period. DFS imposed a total $150 million civil penalty on Deutsche Bank. The penalty covered compliance failures involving Epstein as well as separate deficiencies involving Deutsche Bank's correspondent banking relationships with Danske Bank Estonia and FBME Bank. Therefore, the entire $150 million should not be described as a fine solely for the Epstein relationship. New York DFS – $150 million Deutsche Bank enforcement announcement: https://www.dfs.ny.gov/reports_and_publications/press_releases/pr202007071 Company response: Deutsche Bank acknowledged that accepting Epstein as a customer had been a mistake. CEO Christian Sewing told employees following the regulatory settlement that the bank had made errors and needed to learn from its shortcomings. Deutsche Bank has subsequently stated explicitly that it acknowledges its error in onboarding Epstein in 2013 and regrets its historical relationship with him. The bank says it cooperated with regulatory and law-enforcement authorities and substantially strengthened its anti-financial-crime controls through technology, training and additional specialist staff. Deutsche Bank – Statement regarding Epstein and compliance failures: https://www.db.com/news/detail/20200707-update-on-our-transformation-progress-and-on-today-s-events-message-from-christian-sewing-to-staff Deutsche Bank's own regulatory disclosures subsequently confirmed that the DFS found the bank had violated New York banking laws in connection with its former relationships with Epstein, Danske Bank Estonia and FBME Bank, and that Deutsche Bank paid the $150 million civil penalty during the third quarter of 2020. Key facts: Deutsche Bank accepted Jeffrey Epstein as a client in 2013 despite his previous criminal conviction; classified him as high risk; Epstein and related entities and associates eventually maintained more than 40 accounts at the bank; DFS identified hundreds of transactions totaling millions of dollars that warranted greater scrutiny; transactions included payments to alleged co-conspirators and numerous women; an Epstein associate made more than $800,000 in suspicious cash withdrawals; millions of dollars were paid to law firms; DFS found significant failures in Deutsche Bank's monitoring and anti-money-laundering controls; and the bank acknowledged that onboarding Epstein had been an error. The case is particularly serious because the regulatory criticism was not based merely on Deutsche Bank unknowingly providing services to a customer who was later exposed as a criminal. Epstein's criminal history was already publicly known when Deutsche Bank accepted him in 2013, the bank itself classified him as high risk, and the New York regulator subsequently found that the bank nevertheless failed to adequately monitor activity involving millions of dollars in potentially suspicious transactions.