Deutsche Bank AG is to pay US$157 million to settle separate accusations that it was unaware of its foreign-exchange traders chatting online with competitors and that it has not properly complied with Volcker Rule constraints on investments, the US Federal Reserve said on Thursday.
In unrelated enforcement actions, the Fed fined the lender US$136.9 million for faulty oversight of its foreign-exchange traders and US$19.7 million for failing to keep tabs on the kind of trading banned by the Volcker Rule — the first major enforcement action by a US banking regulator over that core component of the 2010 Dodd-Frank Act.
“We are pleased to resolve these civil enforcement matters with the Federal Reserve,” Deutsche Bank spokeswoman Renee Calabro said.
She declined to comment further on the latest in a series of government actions against the company.
In December last year, the bank agreed to settle a US mortgage-backed securities probe for US$7.2 billion.
In Thursday’s settlement, the Fed ordered the bank to improve its senior management’s oversight of foreign-exchange trading and cooperate in any investigations of the individuals involved.
Transcripts of chats between Deutsche Bank traders and those from other banks emerged more than a year ago in civil litigation over the matter filed in Manhattan, and the US Department of Justice had been looking into the bank’s currency-trading activities.
Last month, the bank said the department had informed it that the US criminal inquiry had been closed without action.
In the Volcker Rule enforcement action, the Fed said that significant gaps existed across key aspects of the bank’s compliance program.
The problems were last year flagged by the company and reported to the Fed, which said in Thursday’s order that Deutsche Bank was not able to properly monitor transactions that fall into allowed market-making rather than banned proprietary trading.
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