White & Case and Sullivan & Cromwell have advised Deutsche Bank as Germany’s largest lender has been fined £500m by the Financial Conduct Authority (FCA) and the New York’s Department of Financial Services over money laundering claims.
UK financial watchdog fined Deutsche Bank £163m for failing to maintain an adequate anti-money laundering (AML) control framework between 2012 and 2015. It is the largest financial penalty for AML controls failings ever imposed by the FCA.
The fine was issued after an FCA investigation into allegations the bank was used by unidentified customers to transfer $10bn out of Russia ‘in a manner that is highly suggestive of financial crime’. Deutsche Bank turned to White & Case dispute resolution partner John Reynolds for legal advice in London.
Deutsche Bank received a 30% discount after it agreed to settle during the early stages of the FCA investigation bringing it down from £229m. The discount did not apply to the £9.1m in commission the bank generated from the suspicious trading that it had to pay the FCA.
Director of enforcement and market oversight at the FCA Mark Steward said: ‘Deutsche Bank was obliged to establish and maintain an effective AML control framework. By failing to do so, Deutsche Bank put itself at risk of being used to facilitate financial crime and exposed the UK to the risk of financial crime. The size of the fine reflects the seriousness of Deutsche Bank’s failings.’
In a separate settlement announced overnight, the New York’s Department of Financial Services confirmed Deutsche Bank will also pay $425m (£340m) to the state’s main financial regulator. The US regulator said in a statement it had worked closely with the FCA on the enquiry which was related to the same transactions.
Sullivan & Cromwell white collar partner Samuel Seymour advised Deutsche Bank on its US settlement.