Author: Nicola Sharp 14 January 2021
Nicola Sharp of financial crime specialists Rahman Ravelli warns that companies have to ensure they are doing all they can to prevent wrongdoing.
Deutsche Bank is to pay more than $130 million to settle allegations of bribery and commodities fraud.
The payment of the fine in the United States is part of a three-year deferred prosecution agreement with the US Justice Department (DOJ) and a related civil settlement with the Securities and Exchange Commission (SEC). The SEC had been investigating a commodities fraud scheme while the DOJ was looking into violations of the US anti-bribery Foreign Corrupt Practices Act.
Deutsche Bank has been at the centre of a number of high-profile financial scandals in recent years relating to its compliance failures. It has now announced that it is to strengthen its compliance programme.
Almost two-thirds of the $130M is a criminal fine, relating to activity between 2008 and 2017. The bank was accused of concealing bribes made to third-party intermediaries by falsely recording them and of internal accounting control violations. Separate to this, it faced allegations of fraudulent and manipulative commodities trading practices involving publicly-traded precious metals futures contracts.
In a statement, the bank said: "While we cannot comment on the specifics of the resolutions, we take responsibility for these past actions. Our thorough internal investigations, and full cooperation with the DOJ and SEC investigations of these matters, reflect our transparency and determination to put these matters firmly in the past."
The statement added that the bank now has 1,600 people working around the world for its anti-financial crime team and intends to invest “significantly’’ in technology to boost its compliance efforts.
This latest problem for Deutsche Bank is yet another case that highlights the importance of the need for companies to ensure they have adequate internal policies and procedures in place to help combat bribery and corruption.
This is especially the case when intermediaries are being used. The use of intermediaries needs to be monitored closely to reduce the risks of bribery being committed. Companies who do use consultants or intermediaries to assist with business deals should conduct internal investigations to ensure their internal practices are robust enough to help prevent wrongdoing.
Nicola is known for her fraud, civil recovery, arbitration and business crime expertise, her experience of leading the largest financial disputes and multinational investigations and her skills in devising preventative measures and conducting internal investigations for corporates.