The US Federal Reserve has fined Deutsche Bank $156.6 million for violating foreign exchange rules and violating the Volcker Rule.
According to the Federal Reserve, Deutsche Bank failed to detect and stop its traders from using chat rooms to communicate with competitors. Central bank officials are examining the individuals’ conduct, and expects the German bank to “cooperate in any investigation”.
The Volcker Rule, part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, aims to restrict United States banks from making investments that do not benefit their customers.
Violations were discovered during a four-year long review of deals within the bank. Deutsche has agreed to improve its oversight of foreign exchange trades in an agreement with the Fed.
The bank said in a statement: “we are pleased to resolve these civil enforcement matters with the Federal Reserve.”
Deutsche Bank is still under investigation by the New York Department of Financial Services. It’s suspected by the US department that the bank’s automated trading platform had been programmed to manipulate foreign exchange rates.
Fine, be that way
Deutsche Bank has been struck by a series of penalty notices and fines over the past year. In February, the bank was subjected to further scrutiny by Russian regulators. The charges concerned manipulating foreign exchange to lower the base for calculating income tax. The bank also coughed up $630 million in January to the same watchdogs.
At the start of the year the UK’s Financial Conduct Authority slapped Deutsche with a £163 million ($208 million) fine for failing to maintain proper anti-money laundering (AML) control frameworks between 2012 and the start of 2016.
In August 2016 the Financial Industry Regulatory Authority (FINRA) fined the bank for “significant supervisory failures” related to research and trading-related information it gave its employees.
A thousand cuts
In the middle of 2016 the bank announced plans to shut down more than a quarter of its branches in Germany, cutting 3,000 jobs in the process. It also scuttled its plans for a new digital bank in the US.
At the start of 2017 the bank took drastic action by banning texts and communication applications like WhatsApp on its premises and on company-issued phones.