Deutsche Bank has agreed to a $425m (£340m) fine to New York’s banking regulator over a trading scheme that moved $10bn (£8.00bn) out of Russia between 2011 and 2015.
The “mirror trading” scheme allowed clients to buy stocks in Moscow in roubles and sell them through Deutsche Bank’s London branch via related parties.
The New York Department of Financial Services (DFS) said the trade of a Russian blue chip stock was cleared through Deutsche Bank’s New York operations, and the sellers were generally paid in US dollars.
The DFS found the bank violated state banking law by conducting its business in an unsafe manner. Deutsche Bank will now be forced to have an independent party monitor its compliance.
“This Russian mirror-trading scheme occurred while the bank was on clear notice of serious and widespread compliance issues dating back a decade. The offsetting trades here lacked economic purpose and could have been used to facilitate money laundering or enable other illicit conduct, and today’s action sends a clear message that DFS will not tolerate such conduct.”