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Compliance Corner: SEC, Deutsche Bank, DoJ

Editorial Staff, January 12, 2021


The latest compliance news: regulatory developments, punishments, guidance, permissions and new product and service offerings.

:SEC, Deutsche Bank, DoJ
The US Securities and Exchange Commission and the Department of Justice have announced charges against Deutsche Bank for breaking the Foreign Corrupt Practices Act 1977.

The bank has agreed to pay fines to both bodies, with more than $43 million going to resolve the SEC’s charges.

According to the SEC’s order, Deutsche Bank engaged foreign officials, their relatives and associates as third-party intermediaries, business development consultants and finders to obtain and retain global business. 

The SEC says that Deutsche Bank's internal accounting controls over the use and payment of such intermediaries left much to be desired, resulting in about $7 million in bribe payments or payments for unknown or unauthorized services. Deutsche, moreover, allegedly recorded these payments inaccurately as legitimate business expenses and its staff falsified invoices and documents.

The SEC has accused Deutsche of breaking the Securities Exchange Act 1934's provisions that relate to books and records. Deutsche Bank agreed to a cease-and-desist order and to 'disgorge' ill-gotten gains of $35 million (with pre-judgment interest of $8 million) to settle matters with the commission. The SEC did not impose a civil penalty because Deutsche has had to pay a $79 million criminal penalty to the DoJ to resolve criminal charges against it.

In total, according to the DoJ, the resolution includes criminal penalties of $85,186,206, criminal disgorgement of $681,480 and compensatory payments to victims of $1,223,738, on top of the $43,329,622 to be paid to the SEC.

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